Bank of America slapped with $225 million fine by federal regulators & More Latest News

Federal regulators have hit Bank of America with a $225 million fine for what they allege have been shortcomings in how the financial institution dealt with jobless advantages in the course of the COVID-19 pandemic. 

The Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB) accused Bank of America of improperly freezing pay as you go playing cards for hundreds of individuals who sought jobless advantages in the course of the pandemic. 

Bank of America

FILE: A Bank of America emblem is seen in New York City, New York, U.S. January 10, 2017. (REUTERS/Stephanie Keith/File Photo / Reuters Photos)

Bank of America contracted with a dozen states to manage pay as you go jobless profit debt playing cards. The financial institution had an computerized fraud filter, which – in line with CFPB – led to hundreds of cardholders having their accounts improperly frozen. 

Federal regulators accused Bank of America of making it troublesome for folks to unfreeze their playing cards, alleging that the agency’s name facilities have been insufficiently staffed, requiring folks to spend hours on maintain attempting to resolve the issue. 

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“Taxpayers relied on banks to distribute needed funds to families and small businesses to rescue the economy from collapse when the pandemic hit,” stated CFPB Director Rohit Chopra. “Bank of America failed to live up to its legal obligations. And when it got overwhelmed, instead of stepping up, it stepped back.”

Bank of America has shot again on the allegations, saying states have been chargeable for reviewing and approving functions and directing the corporate to subject funds. 

“Bank of America’s support to the states enabled the government to successfully issue more than $250 billion in pandemic unemployment benefits to more than 14 million people and overall distributed to more pandemic relief to Americans than other bank,” a spokesman for the corporate stated in an announcement supplied to FOX Business. “In addition, we provided assistance to millions more by deferring mortgage, credit card and other payments.” 

Bank of America stated these transactions continued regardless of the federal government being conscious that the unemployment enlargement in the course of the pandemic created “unprecedented criminal activity where illegal applicants were approved billions of dollars in payments. 

“Bank of America partnered with our state purchasers to establish and combat fraud all through the pandemic,” the company said. “For instance, we labored with California to establish lots of of hundreds of suspicious playing cards and assisted the state in defending billions of {dollars}.” 

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In addition to the fines, Bank of America now faces consent orders from the OCC and CFPB directing the financial institution to overtake its insurance policies and tackle shortcomings – a course of that lingers for years. Per these orders, Bank of America is directed to ascertain a remediation plan to establish harmed customers and decide the quantity of debt that needs to be repaid. 



 

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