On November 28, 2023, the CFPB ordered Bank of America to pay a $12 million penalty for submitting false mortgage lending information to the federal government under a long-standing federal law. The CFPB found that hundreds of Bank of America loan officers failed to ask applicants certain demographic questions that are required under federal law, and then falsely reported that the applicants had declined to answer.
CFPB Director Rohit Chopra said the following in a statement:
“Bank of America violated a federal law that thousands of mortgage lenders have routinely followed for decades. It is illegal to report false information to federal regulators, and we will be taking additional steps to ensure that Bank of America stops breaking the law.”
Bank of America is a global systemically important bank and is the second-largest bank in the United States. HMDA requires mortgage lenders to report information about loan applications and originations to the CFPB and other federal regulators, including demographic data about mortgage applicants. The CFPB conducted a review of Bank of America’s HMDA data collection practices and found that the bank:
Falsely reported that applicants declined to provide information. In at least three months, Bank of America loan officers reported that 100% of mortgage applicants did not provide demographic data when in fact, they were not asking applicants for demographic data.
Failed to adequately oversee accurate data collection. Bank of America failed to ensure that its mortgage loan officers accurately collected and reported demographic information. Despite knowing of the problem, the bank turned a blind eye for years to the fact that loan officers who received applications by phone failed to collect the required data.
According to the CFPB’s consent order, Bank of America violated HMDA and its implementing regulation, Regulation C, as well as the Consumer Financial Protection Act. CFPB ordered Bank of America to take steps to avoid its illegal mortgage data reporting practices and to pay a $12 million penalty to the CFPB’s victims relief fund.
Read the CFPB’s press release here.
The consent order can be found here.