RSSThe Consumer Financial Protection Bureau issued an enforcement action against Bank of America for processing out-of-state garnishment orders against its customers’ bank accounts.
The Charlotte, N.C.-based bank unlawfully froze customer accounts, charged garnishment fees, garnished funds, and sent payments to creditors based on out-of-state garnishment court orders that should have been processed under the laws and protections of the states where the consumers lived, the bureau said. Those actions affected approximately 3,700 out-of-state accounts, racking up at least $592,000 in garnishment fees since August 2011, according to the enforcement order.
The company also inserted “unfair and unenforceable language” into contracts aimed at limiting customers’ rights to challenge garnishments, the bureau said.
The order requires Bank of America to refund or cancel imposed fees from unlawful garnishments, review and reform its system for processing garnishments, and pay a $10 million civil penalty.
“Bank of America imposed unlawful garnishment fees and injured its customers by inserting unenforceable clauses into contracts in an attempt to strip legal rights from families,” said Rohit Chopra. “The CFPB is ordering Bank of America to fix its systems, clean up its contracts, and make its victims whole.”
The $2.5 trillion Bank of America was also the subject of a 2014 CFPB order requiring it to pay $727 million to customers for illegal credit card practices.
