It’s one of the highest financial penalties in years against the bank, which has spent 15 years trying to clean up its reputation.
By Ken Sweet and Michelle Chapmanwill reimburse customers more than $100 million and pay $150 million in fines for “double-dipping” on overdraft fees, withholding reward bonuses on credit cards and opening accounts without customer consent.
Empowered by a broad mandate from the White House, Chopra and the bureau have focused heavily in the past year on the issue of “ junk fees ” — fees charged to Americans that are often seen as unnecessary or exploitative by banks, debt collectors, airlines and concert venues. Banks such as BofA, JPMorgan Chase, Wells Fargo and others have been a target for the bureau under the Biden administration.
The fees often came when customers had routine monthly transactions, like a gym membership. If a customer had too low of a balance to cover the transaction, it would be declined and BofA would charge the customer a $35 fee. The business, who hasn’t been paid, often would recharge the customer’s account, resulting in another $35 non-sufficient funds fee.
BofA has been cutting down on its reliance on overdraft fee revenue for more than a decade and cut how much it charges customers for an overdraft to $15 last year. Brian Moynihan, the bank’s CEO and chairman, told The Associated Press in 2022 that under these new policies, overdraft fee income was down 90% from 2021. The bank said that it voluntarily reduced overdraft fees and eliminated all non-sufficient fund fees in the first half of last year.
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