Consumer Financial Protection Bureau (CFPB)
CFPB and OCC Order Bank of America to Pay $250 Million in Consumer Redress and
CMP
The CFPB and Office of the Comptroller of the Currency (OCC) ordered Bank of America to pay $100 million in consumer redress and pay an additional $150 million in penalties to the two regulatory agencies. The agencies alleged that Bank of America harmed hundreds of thousands of consumers over the period of several years and across multiple product lines by:
Charging Non-sufficient funds fees for multiple presentments of ACH and check transactions. Until February 2022, if a consumer did not have sufficient funds in their account to pay for the transaction and the bank decided not to pay it, Bank of America assessed the consumer a $35 non-sufficient funds fee. Merchants commonly “re-present” these returned transactions—that is, they again try to receive payment—often multiple times. For many years, Bank of America assessed non-sufficient fund fees on ACH and check transactions that it returned unpaid even though it
had already assessed a $35 fee for the same ACH or check transaction that it had previously returned unpaid (i.e., repeat non-sufficient fund fees).
To compete with other credit card companies, Bank of America targeted individuals with special offers of cash and points when signing up for a credit card. Bank of America withheld promised credit card account bonuses, such as cash rewards or bonus points, to tens of thousands of consumers. The bank failed to honor rewards promises for consumers who submitted in-person or over-the-phone applications. The bank also denied sign-up bonuses to consumers due to the failure of Bank of America’s business processes and systems.
From at least 2012, in order to reach now disbanded sales-based incentive goals and evaluation criteria, Bank of America employees applied for and enrolled consumers in credit card accounts without consumers’ knowledge or authorization.
Source – CFPB Press
Release
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2023 Q2 Compliance Video Update
The Q2 Compliance Update Video is now available on InfoSight! Michael Christians provides details around the CFPB Circular on Reopening Deposit Accounts, Fraud Prevention and Detection, Proposed Guidance from Joint Agencies on ROVs (reconsideration of value), the Proposed Rule on AVM Quality Control Standards, and looks ahead at InfoSight’s Q3 Compliance Calendar.
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League InfoSight Highlight: Compliance Outlook 10 Years
In a recent
article we looked back on the last 20 years. Now we turn our attention to the future, and what the compliance landscape may look like in 10 years.
Increased use of technology: Compliance functions will likely become more reliant on technology to help manage and analyze data, automate processes, and detect potential compliance risks. There will likely be a rise in the use of artificial intelligence (AI), machine learning, and predictive analytics, which will assist with the identification of issues and greater efficiency in compliance management.
Focus on privacy and data protection: With the rise of digital technologies, more emphasis will be placed on privacy and data protection. Credit unions will need to stay informed of new regulations and data privacy laws and adapt their policies and procedures accordingly.
Increased collaboration and information-sharing: As new technologies emerge, credit union staff can collaborate more efficiently and in real time, regardless of physical location. Compliance departments will work more closely with other departments, as well as external stakeholders such as regulators, to share information and knowledge and promote a culture of compliance.
Greater emphasis on ethics and social responsibility: As stakeholders demand more transparency and accountability, compliance programs may expand their focus beyond legal and regulatory requirements to include ethical considerations and social responsibility.
Greater diversity and inclusion: Compliance programs may evolve to address issues of diversity and inclusion within the credit union. This may involve providing tools and resources to help the staff board be more intentional about building a culture of inclusion.
League InfoSight continually monitors technological advances and regulatory changes to meet the changing needs of credit unions. We are currently rebuilding our entire technology platform to integrate our products into a single solution to provide a more secure and cohesive system.
We’re working hard as always to ensure we provide the most efficient, user-friendly, and helpful resources and products for your credit union. As we look forward to the next 10 years, we are excited to continue partnering with you to develop solutions for whatever challenges the future holds.
Mary Ann Koelzer
Senior Technology Products Manager, League InfoSight
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