Federal regulators have assessed penalties totaling $225 million on Bank of America for its handling of state unemployment payments during the pandemic.
Bank of America administered a prepaid card program to distribute unemployment insurance and other public benefit payments for 12 states, including Massachusetts. The Office of the Comptroller of the Currency said in a statement yesterday that it found “violations of law and unsafe or unsound practices” relating to the bank’s administration of these programs.
The OCC assessed a $125 million civil money penalty against Bank of America and ordered the bank to provide remediation to consumers who were harmed by the bank’s practices, including those whose access to unemployment benefits was denied or delayed.
The OCC said Bank of America did not adequately investigate and resolve consumer claims of unauthorized transactions, and the agency added that it found other deficiencies in the bank’s administration of the program, including in operational processes, risk management and internal controls.
In a separate statement, the Consumer Financial Protection Bureau said it had fined Bank of America $100 million for its handling of the prepaid card program, including its fraud detection process.
“Bank of America automatically and unlawfully froze people’s accounts with a faulty fraud detection program, and then gave them little recourse when there was, in fact, no fraud,” the CFPB said.
In addition to the fine, the CFPB said Bank of America must pay back money to consumers who had been denied payments because of the fraud filter. The bank must also provide a consequential harm payment to each consumer, and consumers will have the opportunity to go through a further review process for additional redress, the CFPB said. While the enforcement action applies to consumers across the U.S., the CFPB in its statement referred to the experiences of California consumers from the fall of 2020 to mid-2021.
The OCC said remediation to consumers made according to the CFPB order would satisfy the OCC’s order.
Looking for more sales and credit records? Let us know which states you need!
The Warren Group | 2 Corporation Way, Suite 250 | Peabody, MA 01960 | 617-428-5100 | www.thewarrengroup.com Copyright © The Warren Group | All Rights Reserved | Privacy Policy
We're sorry, it appears you don't have the proper subscription to view this page. Please click the button below to purchase or renew your subscription and gain access to this content.
Questions? Please contact us at 617.896.5388, or send us an email at subscriptions@thewarrengroup.com.
It appears someone has logged in to your account from another device. Please click the button below to log back in on this device, and terminate all other sessions.
Questions? Please contact us at 617.896.5388, or send us an email at subscriptions@thewarrengroup.com.