Bank of America hit with $225M in fines from OCC, CFPB

Bank of America in Charlotte, N.C., was fined $225 million for practices tied to it's prepaid card program for disbursing unemployment benefits in California. 

The Office of the Comptroller of the Currency levied a $125 million fine, while the Consumer Financial Protection Bureau imposed a $100 million fine. 

“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 a Thursday press release. 

An enforcement order will also require the $2.5 trillion-asset company to undertake a process that is estimated to result in hundreds of millions of dollars in redress to consumers. 

The CFPB determined that BofA in the fall of 2020 implemented a fraud filter with a simple set of flags that automatically triggered an account freeze, which set a low bar to freeze the unemployment insurance benefits of many people. 

The bureau also determined that the company “made it very difficult for people to unfreeze their prepaid debit cards or for people to report fraudulent use of their cards.” 

In 2014, the CFPB ordered BofA to pay $727 million in redress illegal credit card practices. The company was hit with a $10 million civil money penalty in May tied to its garnishment practices.