The Charlotte-based bank was handed a $100 million fine by the Consumer Financial Protection Bureau, and in a separate order, Bank of America was fined $125 million by the Office of the Comptroller of the Currency. The bank will be required to engage in a process that will provide restitution to affected customers whose accounts were frozen over a "faulty fraud detection program."
“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,” said Acting Comptroller of the Currency Michael Hsu. “Banks must pay attention to the financial health of their customers and conduct their activities in accordance with all consumer protection laws.”
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Bank of America had contracts with about 12 state agencies to deliver unemployment and benefit payments through prepaid debit cards. It now only has one, California, which extended its relationship with the bank.
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