Bank of America, the second largest U.S. bank by assets, engaged in deceptive practices that hurt hundreds of thousands of its customers in recent years, the Consumer Financial Protection Bureau said Tuesday.
The bank charged multiple $35 overdraft fees for the same transaction, failed to properly issue rewards to credit card users, and signed up customers for card accounts without their consent, the CFPB said in a statement.
Charlotte, North Carolina-based Bank of America was ordered to pay a total of $150 million in penalties to the CFPB and another regulator, the Office of the Comptroller of the Currency. It also has to pay about $80.4 million to customers who were unfairly charged bogus fees, on top of the $23 million it already paid to customers who were improperly denied card awards.
“These practices are illegal and undermine customer trust,” CFPB Director Rohit Chopra said in the release. “The CFPB will be putting an end to these practices across the banking system.”
Bank of America spokesman Bill Halldin said in a response the lender “voluntarily reduced overdraft fees and eliminated all non-sufficient fund fees in the first half of 2022,” resulting in a 90% drop in revenue from those fees.
Regulators have punished Wells Fargo for a sales culture that led to the creation of 3.5 million fake accounts. But other lenders have had similar lapses, including U.S. Bank, which paid a $37.5 million fine last year for putting customers into unauthorized accounts.