Bank of America fined $90 million by CFPB for multiple violations

The CFPB has issued a consent order to Bank of America, N.A., for unfair and deceptive acts or practices related to assessing multiple non-sufficient funds fees (NSF Fees) on the same transaction. The Bureau found that --

1. Until 2021 and 2022, respectively, the bank assessed consumers $35 NSF Fees each time the the bank returned as unpaid a re-presented Automated Clearing House (ACH) transaction or check, despite already having charged consumers an NSF Fee on the initial returned transaction (Re-Presentment NSF Fees).
2. The bank ceased assessing these Re-Presentment NSF Fees on ACH transactions in November 2021 and ceased assessing them on checks, along with all other NSF Fees, in February 2022. The Bank’s efforts to reduce fees, including NSF Fees, has led to the Bank charging customers millions of dollars less in fees.
3. From September 2018 until February 2022, the bank generated hundreds of millions of dollars from its practice of charging multiple NSF Fees on represented
   checks or ACH transactions. These fees substantially harmed consumers.
4. Consumers could not reasonably understand that they could be assessed a new $35 fee each time the bank declined to pay the same ACH transaction or check. Even if some consumers did understand that the bank assessed these fees, they still could not reasonably avoid them or otherwise protect their interests against incurring Re-Presentment NSF Fees.

Under the order, the bank must complete its redress of all affected consumers, providing not less than $80.4 million in total redress. It must also pay a civil money penalty of $60 million.

The CFPB also issued an order against the bank to address the Bureau’s findings regarding the bank’s opening unauthorized consumer financial accounts and its misleading statements regarding certain credit cards rewards. Specifically, the Bureau found that in certain instances Bank of America opened credit card accounts without consumer consent and in doing so, obtained consumer credit reports without a permissible purpose, in violation of the Truth in Lending Act and its implementing regulation, the Fair Credit Reporting Act, and the Consumer Financial Protection Act of 2010. The Bureau further found that Bank of America engaged in deceptive acts or practices by: (a) advertising a sign-up bonus for a rewards card on its website, making it appear it was available to all applicants, but later denying the bonus to consumers who applied over the phone or in person and not online; and (b) offering a sign-up bonus for a rewards card to certain consumers but then failing to provide them the promised bonuses due to employee error. The order requires the Bank to come into compliance, pay redress to consumers and verify previously administered redress, and pay a $30 million civil money penalty.