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Bank Of America Garnishment Consumer Financial Protection Bureau Overview:
- Who: The Consumer Financial Protection Bureau has ordered Bank of America to pay a $10 million fine.
- Why: The fine will resolve the agency’s claims that Bank of America engaged in unfair acts and practices and broke the law by processing out-of-state garnishment notices.
- Where: Bank of America is used by consumers nationwide.
The Consumer Financial Protection Bureau has ordered Bank of America to pay $10 million as part of a settlement agreement made to resolve its claims the financial institution engaged in unfair acts and practices.
Bank of America has agreed to pay the fine, as well as to refund at least $592,000 in garnishment fees the CFPB says were unlawfully charged, according to a consent order filed today.
Among other provisions, Bank of America says it will also change its policies for garnishments and discontinue using certain garnishment-related waivers.
Bank of America broke the law by “processing garnishment notices against out-of-state bank accounts” and failed to “apply the appropriate state exemptions to certain consumers’ deposit accounts after receiving garnishment notices,” the CFPB argues.
Bank of America Had ‘Unfair Deposit Agreements’ For Customers, CFPB Says
Further, the CFPB claims Bank of America engaged in “deceptive acts and practices” by misrepresenting to consumers applicable state exemption rights for garnishment and using unfair deposit agreements that went against consumers’ best interests.
“Respondent engaged in deceptive acts and practices by suggesting consumers could not bring legal claims misrepresenting consumers’ legal rights against Respondent regarding garnishment proceedings,” the CFPB said in a consent order.
The CFPB said ultimately that any out-of-state garnishment orders should have been processed using the laws from the state where the consumer resided.
Instead, Wells Fargo applied “the issuing state’s exemptions instead of the exemptions of the consumer’s state of residence, where the states of issuance and residence differ,” according to the CFPB.
A class action lawsuit was filed against Bank of America in February that accused the bank of failing to fulfill its promise to refund punitive fees that had been charged to financially vulnerable account holders during the pandemic.
Have you been charged a garnishment fee by your financial institution? Let us know in the comments!
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20 thoughts onBank of America Fined $10M Over Unlawful Garnishments
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