Enterprise
“Financial institution of America wrongfully withheld bank card rewards, double-dipped on charges, and opened accounts with out consent,” mentioned CFPB Director Rohit Chopra, in an announcement.

NEW YORK (AP) — Financial institution of America will reimburse clients greater than $100 million and pay $150 million in fines for “double-dipping” on overdraft charges, withholding reward bonuses on bank cards and opening accounts with out buyer consent.
Mixed, it is without doubt one of the highest monetary penalties in years towards Financial institution of America, which has largely spent the final 15 years making an attempt to scrub up its repute and market itself to the general public as a financial institution centered on monetary well being and never on overdraft price earnings and monetary trickery.
BofA should refund $100 million to clients, pay $90 million in penalties to the Shopper Monetary Safety Bureau and $60 million to the Workplace of the Comptroller of the Forex. “Financial institution of America wrongfully withheld bank card rewards, double-dipped on charges, and opened accounts with out consent,” mentioned CFPB Director Rohit Chopra, in an announcement. “These practices are unlawful and undermine buyer belief.”
Empowered by a broad mandate from the White Home, Chopra and the bureau have centered closely prior to now yr on the problem of “ junk charges ” — charges charged to People which can be usually seen as pointless or exploitative by banks, debt collectors, airways and live performance venues. Banks akin to BofA, JPMorgan Chase, Wells Fargo and others have been a goal for the bureau underneath the Biden administration.
A part of the fines and penalties come as a result of Financial institution of America had a coverage of charging clients $35 after the financial institution declined a transaction as a result of the shopper didn’t have sufficient funds of their account, the CFPB mentioned. The company decided that the financial institution double-dipped by permitting charges to be repeatedly charged for a similar transaction.
The charges usually got here when clients had routine month-to-month transactions, like a fitness center membership. If a buyer had too low of a steadiness to cowl the transaction, it could be declined and BofA would cost the shopper a $35 price. The enterprise, who hasn’t been paid, usually would recharge the shopper’s account, leading to one other $35 non-sufficient funds price.
The financial institution ended this observe final yr, however will nonetheless must repay clients who obtained charged earlier than the coverage was modified.
BofA has been slicing down on its reliance on overdraft price income for greater than a decade, and lower how a lot it expenses clients for an overdraft to $15 final yr. Brian Moynihan, the financial institution’s CEO and chairman, informed The Related Press in 2022 that underneath these new insurance policies, overdraft price earnings was down 90% from 2021. The financial institution mentioned that it voluntarily lowered overdraft charges and eradicated all non-sufficient fund charges within the first half of final yr.
Financial institution of America additionally provided individuals money rewards and bonus factors when signing up for a card, however the CFPB mentioned the financial institution illegally withheld promised bank card account bonuses.
The CFPB additionally discovered that, since at the least 2012, Financial institution of America workers illegally utilized for and enrolled shoppers in bank card accounts with out their data or authorization. It’s a much like, however smaller than, a cost that was made towards Wells Fargo, which paid billions in fines after it was decided that the San Francisco financial institution opened tens of millions of unauthorized financial institution accounts as a way to meet unrealistic gross sales objectives.
In 2014 the CFPB ordered Financial institution of America to pay $727 million for unlawful bank card practices. Final yr it was ordered to pay a $10 million civil penalty over illegal garnishments. Additionally in 2022, the CFPB and OCC fined Financial institution of America $225 million and required it to pay tons of of tens of millions of {dollars} in redress to shoppers for botched disbursement of state unemployment advantages on the top of the COVID-19 pandemic.