OCC Assesses $125 Million Civil Money Penalty Against Bank of America, Orders Restitution for Unfair and Deceptive Practices

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today assessed a $125 million civil money penalty against Bank of America, N.A., for violations of law and unsafe or unsound practices relating to the bank’s administration of a prepaid card program to distribute unemployment insurance and other public benefit payments. The OCC also ordered the bank to provide remediation to consumers harmed by the bank’s practices and violations of law.

The bank administered the Unemployment Benefits Prepaid Card Program on behalf of 12 states: Arizona, California, Iowa, Kansas, Kentucky, Massachusetts, Maryland, Michigan, North Carolina, New Jersey, Nevada, and South Carolina. The OCC found that the bank’s practices violated Section 5 of the Federal Trade Commission Act, which prohibits unfair or deceptive acts or practices, in connection with the bank’s failure to adequately investigate and resolve consumer claims of unauthorized transactions. The OCC also found other deficiencies in the bank’s administration of the program, including in operational processes, risk management, and internal controls. Beginning in 2020, these deficiencies resulted in violations of law and harm to consumers.

The order requires the bank to provide remediation to harmed consumers whose access to unemployment benefits was denied or delayed. Remediation includes compensation for the financial harm suffered due to a loss of access to unemployment funds caused by, among other things, failing to timely reimburse consumers for unauthorized transactions and wrongfully freezing or blocking prepaid card accounts. The order also requires the bank to take comprehensive corrective action to improve its risk management and oversight over the program as well as its contract review and approval process, and enterprise-wide complaints risk management.

“Today’s action demonstrates the OCC’s commitment to holding our regulated institutions accountable for treating consumers fairly,” said Acting Comptroller of the Currency Michael J. Hsu. “The bank failed these prepaid cardholders by denying them access to their mandated unemployment funds during the height of the pandemic, and leaving these vulnerable consumers without an effective way to remedy the situation. Banks must pay attention to the financial health of their customers and conduct their activities in accordance with all consumer protection laws. When they don’t, we will act accordingly.”

The OCC’s civil money penalty and remediation requirement is separate from, but coordinated with, the Consumer Financial Protection Bureau (CFPB), which issued an enforcement order today against the bank. The CFPB ordered the bank to pay a $100 million civil money penalty and redress harmed consumers. Remediation payments made by the bank to these consumers pursuant to the OCC’s order will also satisfy similar obligations required by the CFPB action.

The OCC penalty will be paid to the U.S. Treasury.

Related Links

• Consent Order (PDF)
• Consent Order for Civil Money Penalty (PDF)