On Tuesday, the Consumer Financial Protection Bureau (CFPB) said it had ordered Bank of America to pay a $12 million penalty for falsifying mortgage lending information.
According to the bureau for at least four years hundreds of Bank of America loan officers failed to ask mortgage applicants certain demographic questions as required by federal law, but reported to the federal government that the applicants had chosen not to respond.
“Bank of America violated a federal law that thousands of mortgage lenders have routinely followed for decades,” CFPB Director Rohit Chopra said. “It is illegal to report false information to federal regulators, and we will be taking additional steps to ensure that Bank of America stops breaking the law.”
The bureau said the $12 million penalty will go to the CFPB victim’s relief fund. Bank of America, headquartered in Charlotte, N.C., reportedly had $2.4 trillion in assets, making it the second-largest bank in the U.S. The bank’s actions violate the Home Mortgage Disclosure Act (HDMA) which requires lenders to report information about loan applications and originations to the federal government, including to the CFPB. Data collected is used to monitor whether financial institutions are serving the housing needs of their communities, and to identify possible discriminatory lending patterns.
The CFPB said the law requires financial institutions to report on demographic data about its mortgage applicants. CFPB’s review of Bank of America’s HMDA data collection practices found that the bank was submitting false data, including that applicants were declining to answer demographic questions. According to the CFPB, Bank of America hundreds of loan officers reported that 100 percent of their mortgage applicants declined to provide their demographic data over at least a three month period.
CFPB also cited the bank for failing to adequately oversee accurate data collection by not ensuring that its mortgage loan officers accurately collected and reported the data. The CFPB said the bank identified that many loan officers were failing to collect the demographic data as early as 2013, but that the bank did nothing to fix the issue.
Previously this year, CFPB ordered Bank of America to pay more than $200 million for illegally charging junk fees, withholding credit card rewards and opening fake accounts. In 2022, the CFPB ordered Bank of America to pay $225 million in fines and refund hundreds of millions of dollars to consumers for botched disbursement of state unemployment benefits, as well as fining it $10 million for unlawful garnishments of customer accounts. And in 2014, the bureau ordered Bank of America to pay $727 million for illegal and deceptive credit card marketing practices.