Federal regulators are penalizing Bank of America to the tune of $250 million for allegedly taking advantage of customers.
The Consumer Financial Protection Bureau announced Tuesday that the bank will pay over $100 million to the consumers who were adversely impacted and another $150 million in penalties to the CFPB and the Office of the Comptroller of the Currency.
The bank has been accused of "systematically double-dipping on fees imposed on customers with insufficient funds in their account, withholding reward bonuses explicitly promised to credit card customers, and misappropriating sensitive personal information to open accounts without customer knowledge or authorization."
CFPB director Rohit Chopra said in a statement, "These practices are illegal and undermine customer trust. The CFPB will be putting an end to these practices across the banking system."
The OCC similarly determined that the bank's double-dipping on fees was illegal.
As a result, the bank is required to pay $90 million in penalties to the CFPB and another $60 million to the OCC.
Bank of America had a policy whereby customers would be hit with a $35 charge if they had a transaction declined on account of insufficient funds in their account. With the alleged objective of harvesting junk fees, the bank would allow fees to be repeatedly charged for the same interactions and did so over a period of multiple years, according to the CFPB.
While allegedly double-dipping, the bank has also been accused of signing up tens of thousands of customers on false promises of cash rewards and points, then failing to follow through.
The CFPB's and OCC's penalties also reflect an alleged long-standing scheme undertaken by Bank of America employees that damaged customers' credit scores.
Since 2012, employees seeking to cut corners in order to hit incentive goals and satisfy evaluation criteria are said to have illegally used consumers' credit reports without their consent to apply for and enroll in credit card accounts. Although the bank employees appear to have benefited, the customers whose information was illegally used without their knowledge "were charged unjustified fees, suffered negative effects to their credit profiles, and had to spend time correcting errors."
Axios reported that while ostensibly different in scope, the details of this scandal are reminiscent of what Wells Faro was accused of in 2016.
Wells Fargo ended up agreeing in February 2020 to pay a $3 billion fine to settle the resultant civil lawsuit and to resolve a criminal prosecution filed by the Department of Justice, after it was discovered that bank employees opened millions of savings and checking accounts in the names of extant customers without their consent, reported NBC News.
The CFPB stressed that Bank of America has a long history of ripping off customers, having been forced to cough up $727 million to its victims for illegal credit card practices in 2014 and a fine of $225 million last year for "wrongfully freezing accounts" at the height of the pandemic.
This time around, Bank of America has been ordered to compensate the victims of the "unlawful non-sufficient fund fees who have not already been made whole by the bank." This approximate total is $80.4 million in consumer redress.
Customers owed bonuses who have not yet been compensated will similarly be made whole.
A CFPB spokesman told MarketWatch that customers affected by these alleged abuses don't have to do anything to get what's owed them.
"Depending on the circumstances of the consumer, Bank of America will deposit funds into the consumer's deposit account or will send the consumer a check," said the spokesman.
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Republican lawmakers are expanding an investigation into banks allegedly voluntarily sharing customers' private financial data with the FBI around the time of the Jan. 6 riot at the Capitol, the GOP's House Judiciary Committee announced Monday.
"The banks should not be conducting a dragnet for the FBI where every customer is a suspect, and if they are, we need to do something about it because it's an end-run around the Constitution," Rep. Thomas Massie (R-Ky.) told TheBlaze in an interview Monday afternoon.
"Did the FBI wink and nod at the banks and say, 'Well, we can't ask you to give this to us, but if you voluntarily gave it to us, we can receive it?'" Massie said, adding that if such an action had in fact occurred, he would consider it to be "just more evidence of malfeasance at the FBI."
Rep. Massie and Rep. Jim Jordan (R-Ohio) fired off letters Monday to the CEOs of six of the country's largest financial institutions: JP Morgan Chase & Company, Citigroup, Truist Financial Corporation, Wells Fargo, U.S. Bancorp, and PNC Financial Services.
"Just like with the Twitter censorship, if you have one company in a field doing it, probably the rest of them are as well," Massie said. Massie emphasized that the letters were not based on a mere "hunch." To the contrary, they were based on testimony from career FBI officials about Bank of America sharing customers' financial information.
"[The FBI whistleblowers] have no reason to make this up. And so I think there is some there-there. We need to find out what that is."
The letters summarize the testimony of two FBI whistleblowers. Those whistleblowers told the Select Subcommittee on the Weaponization of the Federal Government that the Bank of America voluntarily provided the FBI with a list of individuals who made transactions in the D.C. area in a three-day timeframe around the January 6, 2021, riot at the Capitol.
Bank of America also provided the FBI with transactions at gun shops, Massie told TheBlaze. Crucially, the gun shop purchases were not geofenced to D.C. and were not limited in time.
"I would use cash for purchases that I don't want the government to know about, because based on information we have from FBI whistleblowers, it seems your financial data is not safe and your privacy is not maintained by the banks with respect to the government."
"The banks generated the list of suspects for the FBI," Massie also said.
"If there’s something that the government is precluded from doing by the Constitution, they can’t create a loophole by having private institutions who aren’t bound by the Constitution do it for them and then share it with them."
The letters, dated June 12, were addressed to JP Morgan Chase & Company CEO Jamie Dimon, Citigroup CEO Jane Fraser, Truist Financial Corporation CEO William H. Rogers Jr., Wells Fargo CEO Charles W. Scharf, U.S. Bancorp CEO Andrew Cecere, and PNC Financial Services CEO William S. Demchak.
The Committee on the Judiciary and the Select Committee on the Weaponization of the Federal Government requested a response by June 26 to produce documents related to communications with federal law enforcement agencies concerning the use of their products, such as debit and credit cards.
If the banks do not comply with the request, Massie said the next step would be a subpoena.
If the banks do comply with the request, depending on what members find, the committee may call in the banks to talk to them. Depending on what the committee finds if and when the banks produce the requested documents, Massie told TheBlaze new legislation preventing it happening again could be on the table.
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The House Judiciary Committee will investigate Bank of America's decision to hand over private customer data to the FBI.
In February 2021, Tucker Carlson obtained evidence that Bank of America, the second-largest bank in the United States, was helping the FBI investigate Jan. 6 by combing through customer data and voluntarily handing it over to federal investigators.
Carlson reported at the time:
In the days after the Jan. 6 riot at the Capitol, Bank of America went through its own customers' financial and transaction records. These were the private records of Americans who had committed no crime; people who, as far as we know, had absolutely nothing to do with what happened at the Capitol. But at the request of federal investigators, Bank of America searched its databases looking for people who fit a specific profile.
That "profile," Carlson explained, was "remarkably broad."
"Any purchases of anything in Washington, D.C.; any overnight stay anywhere in an area spanning three jurisdictions and hundreds of miles; any purchase not just of legal firearms, but anything bought from a 'weapons-related merchant,' T-shirts included; and any airline-related purchases — not just flights to Washington, but flights to anywhere, from Omaha to Thailand. That is an absurdly wide net," he explained.
Ultimately, Bank of America identified 211 individuals who met the "thresholds of interest." The bank then allegedly turned over those customers' data without a court order and without ever notifying those customers.
The House Judiciary Committee and Subcommittee on the Weaponization of the Federal Government sent Bank of America CEO Brian Moynihan a letter on Thursday informing the bank of the investigation.
The letter cites an FBI whistleblower who testified that Bank of America "data-mined its customer base."
"An FBI whistleblower has disclosed that shortly after the events at the Capitol on January 6, 2021, Bank of America (BoA) provided the FBI — voluntarily and without any legal process — with a list of individuals who had made transactions in the Washington, D.C., metropolitan area with a BoA credit or debit card between January 5 and January 7, 2021," the letter states.
According to the letter, other FBI officials have corroborated the whistleblower's claims.
"This testimony is alarming," the letter declares. "According to veteran FBI employees, BoA provided, without any legal process, private financial information of Americans to the most powerful law enforcement entity in the country. This information appears to have had no individualized nexus to particularized criminal conduct, but was rather a data dump of BoA customers’ transactions over a three-day period.
"This information undoubtedly included private details about BoA customers who had nothing at all to do with the events of January 6," the letter continues. "Even worse, BoA specifically provided information about Americans who exercised their Second Amendment right to purchase a firearm."
Specifically, lawmakers are requesting Bank of America turn over any documents and communications related to their voluntary cooperation with the FBI, as well as "any internal database of firearms purchases by BoA customers."
The letter, written by Judiciary Chairman Jim Jordan (R) and Rep. Thomas Massie (R-Ky.), gives Bank of America until June 8 to comply.
The bank has not yet responded to the letter.
However, last week the bank said it "follows all applicable laws and regulatory requirements to receive, evaluate, process, safeguard, and narrowly respond to law enforcement requests."
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Rep. Thomas Massie said the FBI requested the ‘huge list’ of lawful Americans’ financial records from Bank of America.
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