Bank of America class action claims company improperly handled CARES Act forbearances

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Bank of America CARES class action overview: 

• Who: A Bank of America customer is suing the bank.
• Why: The plaintiff says the bank erroneously reported loan defaults to credit reporting agencies while loans were in CARES Act forbearance.
• Where: The Bank of America CARES class action was filed in an Illinois federal court.

Bank of America engages in unlawful and erroneous credit reporting practices for some of its customers whose loans were put in legal forbearance under the CARES Act, hurting their ability to get credit from other lenders, a new class action lawsuit alleges.

Plaintiff Craig Mirabile filed the class action against Bank of America, National Association (Bank of America) on March 20 in an Illinois federal court alleging violations of the Fair Credit Reporting Act (FCRA).

According to the lawsuit, Mirabile’s mortgage loan was serviced by Bank of America. The loan was current in March 2020, however he took the opportunity to obtain a series of forbearances from Bank of America under the CARES Act.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act allowed some mortgagees to pause or reduce their payments for a limited period of time without consequence to their credit scores. At the expiration of the last forbearance, Mirabile resumed monthly payments, he says.

However, Bank of America reported him as delinquent with respect to two or more of the payments during and immediately after the forbearance ended, despite him making timely payments during those months, the lawsuit alleges. The report was made to all three of the major credit bureaus: Experian, Equifax and Trans Union.

“Under the CARES Act, if a creditor or servicer extends a forbearance on a loan which is current, it must report to credit reporting companies that the borrower is current,” Mirabile states.

Despite forbearance, plaintiff was confirmed as delinquent, he says

On August 5, 2022, Mirabiles says he wrote to the three major credit bureaus asking that they correct the credit reporting. The credit bureaus allegedly contacted Bank of America in the course of investigating the dispute, and Bank of America responded that its credit reporting was accurate.

“As a result of the adverse reporting, Plaintiff was unable to obtain a loan and engage

in a real estate deal and suffered damage,” Mirabile alleges. “On information and belief, Bank of America’s conduct was part of a pattern and practice of improperly handling CARES Act forbearances.”

He’s suing on behalf of anyone else similarly situated in their experience with a Bank of America mortgage and the CARES Act. He’s suing for violations of the FCRA and consumer fraud and seeking damages, fees, costs and a jury trial. 

Meanwhile, consumers recently filed a trio of class action lawsuits against Bank of America over claims the financial institution misleadingly marketed PPP loans, made unauthorized Zelle withdraws and negligently allowed Zelle to suffer a glitch. 

What do you think of the allegations against Bank of America in this case? Let us know in the comments! 

The plaintiff is represented by Daniel A. Edelman, Carly M. Roman of Edelman, Combs, Latturner & Goodwin, LLC

The Bank of America class action lawsuit is Craig Mirabile et al., v. Bank of America, National Association, Case No. 1:23-cv-01719 in the U.S. District Court for the Northern District of Illinois

Read About More Class Action Lawsuits & Class Action Settlements:

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• Bank of America class action alleges company does not properly investigate unauthorized card use
• Bank of New York Mellon, Bank of America class action alleges company discriminates against Hawaiian, Miamian homeowners