On July 14, 2022, the OCC assessed a $125 million civil money penalty against Bank of America, N.A., for violations of law and unsafe or unsound practices relating to the bank’s administration of a prepaid card program to distribute unemployment insurance and other public benefit payments. The OCC also ordered the bank to provide remediation to consumers harmed by the bank’s practices and violations of law.
Bank of America administered the Unemployment Benefits Prepaid Card Program on behalf of 12 states and the OCC found that the bank’s practices violated Section 5 of the Federal Trade Commission Act, which prohibits unfair or deceptive acts or practices. In particular, the bank failed to adequately investigate and resolve consumer claims of unauthorized transactions. The OCC also found other deficiencies in the bank’s administration of the program, including in operational processes, risk management, and internal controls, which resulted in violations of law and harm to consumers.
In the consent order issued by the OCC, Bank of America was required to:
Provide remediation to harmed consumers whose access to unemployment benefits was denied or delayed; and
Take comprehensive corrective action to improve its risk management and oversight over the program as well as its contract review and approval process, and enterprise-wide complaints risk management.
In a separate blog post, we wrote about the CFPB and the OCC fining Bank of America over botched disbursement of state benefits.
Read the OCC’s full release here.
The consent order can be found here.