The Consumer Financial Protection Board (CFPB) said Tuesday that Bank of America Corp.
BAC,
would pay a total of $250 million for illegally charging junk fees, withholding credit card rewards, and opening fake accounts.
The bank will pay more than $100 million to consumers who were harmed by these activities. The Office of the Comptroller of the Currency (OCC) said the bank’s “double-dipping on fees” was illegal.
Bank of America will pay penalties of $90 million to the CFPB and $60 million to the OCC.
“Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” said CFPB Director Rohit Chopra. “These practices are illegal and undermine customer trust. The CFPB will be putting an end to these practices across the banking system.”
A Bank of America spokesman said, “We voluntarily reduced overdraft fees and eliminated all non-sufficient fund fees in the first half of 2022. As a result of these industry leading changes, revenue from these fees has dropped more than 90%.”
The spokesperson referred to a Jan. 11, 2022 announcement about Bank of America reducing its overdraft fees and eliminating non-sufficient fund fees.
Bank of America stock was up 1% in regular trades.
The moves came amid a crackdown by the Biden administration against junk fees.
In December, Wells Fargo & Co.
WFC,
agreed to pay $3.7 billion for wrongdoing and mismanagement, with more than than $2 billion in redress to consumers.
The CFTC said that Wells Fargo had harmed millions of people through wrongful car repossessions, improper denials of mortgage-loan modifications, and surprise overdraft fees that were lobbed at consumers who had enough funds at the time of their transactions.
Separately on Tuesday, William F. Galvin, the Secretary of the Commonwealth of Massachusetts, ordered Raymond James Financial Services, Inc.
RJF,
to return $8.25 million plus interest to customers who were charged “unreasonably high fees” as part of a settlement, according to a statement.
He also ordered Raymond James to pay $4.2 million in fines and penalties to the six states involved in the probe of the financial firm.
Galvin said an investigation revealed that the broker-dealer levied “unreasonable commissions” on more than 270,000 equity transactions since 2018.
The broker applied a $75 minimum commission regardless of the “reasonableness” of the commission. Raymond James stock was up 0.6% in recent trades.
Also read (from December 2022): Wells Fargo ordered to pay $3.7 billion for alleged mismanagement of auto loans, mortgages and deposit accounts
This story originally appeared on Marketwatch
