The Consumer Financial Protection Bureau (CFPB) has detailed an action order against Bank of America for a series of alleged infractions.
The CFPB alleges Bank of America systematically double-dipped on fees imposed on customers with insufficient funds in their account; withheld reward bonuses promised to credit card customers; and misappropriated sensitive personal information to open accounts without customer knowledge or authorization.
According to the CFPB, Bank of America will pay more than $100 million to consumers and $150 million in penalties to the CFPB and Office of the Comptroller of the Currency (OCC).
“Bank of America wrongfully withheld credit card rewards, double-dipped on fees and opened accounts without consent,” CFPB Director Rohit Chopra said. “These practices are illegal and undermine customer trust. The CFPB will be putting an end to these practices across the banking system.”
In 2014, the agency ordered Bank of America to pay $727 million in redress to its victims for alleged illegal credit card practices; in May 2022, the CFPB ordered Bank of America to pay a $10 million civic penalty regarding over alleged unlawful garnishments and, later in 2022, the CFPB and OCC fined Bank of America $225 million and required it to pay hundreds of millions of dollars in redress to consumers for alleged botched disbursement of state unemployment benefits at the height of the COVID-19 pandemic.
With regard to enforcement action under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial protection laws.
The CFPB alleges Bank of America’s practices violated the Act’s prohibition on unfair and deceptive acts or practices and the financial institution also allegedly violated the Fair Credit Reporting Act by using or obtaining consumer reports without a permissible purpose in connection with unauthorized credit cards.