Bank of America Corp. agreed to pay $150 million in fines and $100 million to customers for improperly charging extra fees, withholding rewards and opening unauthorized credit-card accounts, U.S. regulators said.
The Consumer Financial Protection Bureau said it fined the bank for "systematically double-dipping on fees imposed on customers with insufficient funds in their account." The Charlotte, North Carolina-based lender also failed to pay promised credit-card reward bonuses and enrolled customers for cards without their knowledge or authorization, the CFPB said.
Bank of America agreed to pay $90 million of the penalty to the CFPB and $60 million to the Office of the Comptroller of the Currency.
The company didn't admit to or deny the allegations as part of the settlement.
The regulators have brought similar actions against Wells Fargo & Co. and U.S. Bancorp. San Francisco-based Wells Fargo has been under intense regulatory scrutiny for a raft of scandals dating back to 2016, including the opening of accounts without customers' consent.
More recently, the CFPB fined Minneapolis-based U.S. Bancorp $37.5 million for a similar practice.
"Bank of America wrongfully withheld credit-card rewards, double-dipped on fees and opened accounts without consent," CFPB Director Rohit Chopra said in a statement Tuesday. "These practices are illegal and undermine customer trust."
The consumer-protection agency found that Bank of America charged consumers a $35 overdraft fee and then "double-dipped" by allowing fees to be charged repeatedly for the same transaction, according to the statement. That allowed the bank to generate "substantial additional revenue," the bureau said.
Fee Cutbacks
Bank of America said in an emailed statement that it "voluntarily reduced overdraft fees and eliminated all non-sufficient fund fees in the first half of 2022." It declined to address the case or the allegations against the lender.
This isn't Bank of America's first recent regulatory penalty. A year ago, the lender was fined $225 million for unfair and deceptive practices related to a prepaid-card program to distribute unemployment insurance and other public-benefit payments during the pandemic.
It was also ordered to pay a $10 million penalty and repay fees that the lender charged customers when garnishing wages.
Separately on Monday, the Securities and Exchange Commission announced a $6 million penalty settling charges against Bank of America's Merrill Lynch unit for failing to file hundreds of Suspicious Activity Reports from 2009 to 2019. Merrill also agreed to pay another $6 million to settle related charges brought by the Financial Industry Regulatory Authority.
