The Consumer Financial Protection Bureau (CFPB) has imposed a $12 million fine on Bank of America for consistently providing incorrect information to federal regulators.
This penalty addresses violations of the Home Mortgage Disclosure Act of 1975, which mandates lenders to accurately report data about mortgage applications to safeguard consumers from predatory practices.
The CFPB found that numerous loan officers at Bank of America failed to collect essential demographic data from mortgage applicants, instead falsely reporting that applicants chose not to provide this information. This practice, starting as early as 2013, continued unchecked for years.
Rohit Chopra, CFPB Director, emphasised the illegality of misreporting information to regulators, stressing the need for Bank of America to comply with federal law.
“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.”
Says CFPB Director Rohit Chopra,
The CFPB’s action is part of a broader initiative to combat racial discrimination in housing and mortgage lending.
The bank’s spokesperson, Bill Halldin, acknowledged some inaccuracies in data collection but claimed that the majority of applications were handled correctly. The fine imposed will contribute to the CFPB’s fund for victims’ relief.
Bank of America, a major player in the mortgage lending sector, previously faced CFPB action in July, resulting in a $150 million fine for various violations, including charging customers excessive fees.
The bank’s track record and substantial mortgage lending activities underscore the significance of this latest regulatory action.