The subject of a CNBC investigation last year, Bank of America was fined $225 million for botching unemployment benefits at the height of the swine flu.
The firm was fined $100 million by the Consumer Financial Protection Bureau and $125 million by the Office of the Comptroller of the Currency. The order requires Bank of America to engage in a process that will give back money to consumers who had their accounts frozen.
The fines were made public on Thursday.
The bank left vulnerable consumers without an effective way to remedy the situation by denying them access to their mandated unemployment funds during the height of the epidemic. Paying attention to the financial health of their customers and conducting their activities in accordance with all consumer protection laws is what banks need to do.
The unemployment and benefit payments were delivered through Bank of America. The relationship was recently extended by California. The cards were the target of a lot of fraud when the unemployment rate went up.
The states were responsible for approving applications and directing BofA to issue payments, according to the bank. Bank of America said it helped the government to issue more than $250 billion in unemployment benefits to more than 14 million people.
Bank of America said that it worked with state clients to identify and fight illegal applicants who got states to approve tens of billions of dollars in payments.
Three people who were receiving unemployment insurance in California during the Pandemic were profiled by CNBC, who said they initially found no recourse from the bank when their accounts were frozen. A single mother had to open her child's money to survive. When a victim told CNBC how she left a grocery store empty-handed, she cried. The musician said he had to live in his car for a few weeks after his money was taken. The bank credited them for their missing money.
According to an investigation by CNBC, states like California and Nevada saw an outsized share of transaction fraud due to the fact that their unemployment insurance was distributed through debit cards without chips.
Government cards with no chips are usually more expensive to produce, according to card experts.
The Electronic Fund Transfer Act requires a financial institution to conduct a prompt, reasonable, and timely investigation when there is an error in the transfer of money.
The economy was saved from collapse when taxpayers relied on banks to distribute funds to families and businesses. Bank of America didn't live up to its legal obligations Instead of stepping up it stepped back.
All Rights Reserved © 2024
