CHARLOTTE — Charlotte-based Bank of America will have to pay a federal fine of $225 million, according to our partners at The Charlotte Observer.
Regulators said the bank mishandled giving out unemployment benefits during the pandemic. They also said the bank’s fraud detection froze accounts for thousands of out-of-work Americans.
On Thursday, the Office of the Comptroller of the Currency said it estimated $125 million in civil penalties against the bank, and the Consumer Financial Protection Bureau ordered the bank to pay a $100 million civil money penalty.
According to federal regulators, the violations are connected to unsafe or unsound prepaid card program distribution of unemployment insurance and other public benefit payments.
“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 in a statement.
In addition to the fine, the bank will also have to repay those customers wrongly denied access to benefits. They could even ask for more money.
Bank of America said it worked with states to help fight fraudulent claims.
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