- Bank of America will allocate $100 million towards restitution for affected consumers and pay $150 million in civil penalties.
- Coinbase CEO Brian Armstrong responded to a tweet where someone mentioned that their Bank of America accounts had been closed because of transactions with Coinbase.
On Tuesday, Bank of America (BAC.N) reached a settlement wherein they agreed to pay fines and compensation totaling $250 million. The settlement arises from allegations that the bank engaged in a systematic practice of double-charging customers fees, failing to provide promised credit card benefits, and opening unauthorized accounts.
As part of the settlement, Bank of America will allocate $100 million towards restitution for affected consumers and pay $150 million in civil penalties. The Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) asserted that the bank violated various laws, which commenced in 2012.
According to a statement by the CFPB, Bank of America generated substantial profits by imposing multiple fees on customers who lacked sufficient funds in their accounts. This practice reportedly occurred from February 2018 to February 2022. Regulators argued that consumers were unaware that each declined transaction would result in a $35 fee, as such expectations were unreasonable and unclear.
Bank of America responded with a statement revealing that it voluntarily eliminated or reduced various fees in the previous year. The CFPB has taken action against what it refers to as “junk fees,” including overdraft and non-sufficient fund fees, claiming that lenders unjustly charge customers for banking services.
Bank of America Fails to Deliver Promised Rewards to Credit Card Holders
The CFPB revealed that Bank of America, headquartered in Charlotte, North Carolina, neglected to fulfill its commitment to provide cash rewards and bonus points to tens of thousands of credit card holders.
As part of the settlement, Bank of America agreed to pay penalties amounting to $90 million to the CFPB and $60 million to the OCC. Furthermore, the bank committed to providing regulators with updates on its progress in ensuring compliance over one year.
In a separate matter, Bank of America’s financial advisory division, Merrill Lynch, Pierce, Fenner & Smith, has reached a settlement requiring them to pay $12 million in penalties to the U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority. This penalty stems from their failure to submit numerous suspicious activity reports to regulators between January 2009 and November 2019.
The issue was discovered by Merrill in 2019, as indicated by the SEC’s order. In response, the bank issued a statement acknowledging the matter and confirming that they reported it to the regulators. They further stated that they have since improved their process and training to ensure the appropriate filing of these reports in the future.
CEO Brian Armstrong Addresses Bank of America Account Closures
Coinbase CEO Brian Armstrong responded to a tweet where someone mentioned that their Bank of America accounts had been closed because of transactions with Coinbase. Armstrong expressed his concern by replying to the tweet and asking if any other Bank of America customers were experiencing a similar issue. He concluded his response by stating that such actions were not acceptable. This comes at a time when there are rumours that he deleted some of his old tweets.
Any other @BankofAmerica customers seeing this? If so, not ok.
See poll below https://t.co/7r4szZK1Te
— Brian Armstrong 🛡️ (@brian_armstrong) July 13, 2023
Several of the tweets that Armstrong removed appear to express viewpoints and beliefs that the CEO may no longer align with. Alternatively, these tweets could potentially have negative consequences for his business if he were to maintain his position on them.
Armstrong has deleted a considerable number of tweets to the extent that there is now a dedicated Github repository specifically documenting the tweets deleted by the CEO, dating back to 2013.
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