Bank of America agreed to pay $12 million to settle charges that its loan officers routinely filed false mortgage lending information to the federal government, according to the Consumer Financial Protection Bureau (CFPB).
The penalty is set to be paid into the CFPB’s victims relief fund.
The CFPB said the bank failed to ask mortgage applicants the demographic questions about race, ethnicity and sex that are required by law, and then told the government that the applicants chose not to respond. The demographic data can be used by the public and regulators to monitor whether a bank is serving its community's housing needs and to identify possible discriminatory lending patterns, the CFPB said.
The agency also charges that the bank failed to properly monitor its mortgage loan officers over collecting and reporting the data, which is also required under the law.
A Bank of America spokesperson said in a statement to Kiplinger that the bank properly collected demographic data "in more than 99 percent of applications in the years reviewed by the CFPB and consistently had lower percentages of applicants not disclosing their race compared to annual industry averages."
He also said that after receiving one complaint in 2020, the bank conducted its own review and notified the government, an action that it said prompted this inquiry.
"As the CFPB notes, we took additional steps in 2020 and 2021 to enhance our monitoring and training to ensure employees ask applicants for required racial, ethnic and gender information," the spokesperson said. "This data collection issue had no impact on applications."
Government crack down on banks
The CFPB's action comes as the federal government has been cracking down on financial institutions over a range of lending practices, junk fees and more.
Bank of America has been fined several times over illegal behavior since 2014, according to the CFPB. In July, for example, the CFPB and the Office of the Comptroller of the Currency (OCC) fined the bank a total of $250 million for illegally charging junk fees, withholding credit card rewards and opening fake accounts, as Kiplinger previously reported.
In 2022, the CFPB and OCC ordered the bank to pay $225 million in fines and refund hundreds of millions of dollars to consumers for botched disbursement of state unemployment benefits. Also in 2022, Bank of America was fined $10 million for illegally garnishing the accounts of thousands of customers.
Those fines were preceded by a $727 million fine that the bank was ordered to pay consumers in 2014 for illegal and deceptive credit card marketing practices.
The CFPB encourages people to submit complaints about financial products or services and says that it receives more than 20,000 complaints weekly. To submit a complaint, visit the CFPB’s website or call (855) 411-CFPB (2372).
