Financial institution of America, the second-largest U.S. financial institution by belongings, engaged in misleading practices that harm a whole bunch of hundreds of its clients in recent times, the Consumer Financial Protection Bureau stated Tuesday.
The financial institution charged a number of $35 overdraft charges for a similar transaction, didn’t correctly problem rewards to bank card customers and signed up clients for card accounts with out their consent, the CFPB stated in a statement.
Charlotte, North Carolina-based Financial institution of America was ordered to pay a complete of $150 million in penalties to the CFPB and one other regulator, the Workplace of the Comptroller of the Forex. It additionally has to pay about $80.4 million to clients who had been unfairly charged bogus charges, on prime of the $23 million it already paid to clients who had been improperly denied card awards.
“These practices are unlawful and undermine buyer belief,” CFPB Director Rohit Chopra stated within the launch. “The CFPB might be placing an finish to those practices throughout the banking system.”
Financial institution of America spokesman Invoice Halldin stated in a response the lender “voluntarily diminished overdraft charges and eradicated all non-sufficient fund charges within the first half of 2022,” leading to a 90% drop in income from these charges.
The announcement Tuesday is the most recent signal that a few of the practices uncovered by the Wells Fargo pretend accounts scandal in 2016 weren’t confined to that financial institution.
Regulators have punished Wells Fargo for a gross sales tradition that led to the creation of three.5 million pretend accounts. However different lenders have had comparable lapses, including U.S. Financial institution, which paid a $37.5 million positive final yr for placing clients into unauthorized accounts.