Bank of America to Pay $30 Million, Fix Violations on Servicemembers’ Accounts

30 May 2015 | Author: | No comments yet »

Bank of America Fined for Violations of Military Relief Law.

CHARLOTTE, N.C., May 29, 2015 (BUSINESS WIRE) — Bank of America today entered into a consent order with the Office of the Comptroller of the Currency (OCC) in which it agreed to continue to make improvements to its compliance practices, specifically enhancing its non-home loan collections litigation and Servicemembers’ Civil Relief Act (SCRA) processes as well as its enterprise compliance program. May 21, 2015, The Company’s Board of Directors approved a quarterly cash dividend of $0.85 per share of common stock payable on June 15, 2015 to shareholders of record at the close of business on June 1, 2015. The order covers collections litigation from several years ago for a small percentage of credit card and deposit overdraft customers who defaulted on their account, and also covers SCRA account servicing.

The regulators say that from 2006 to the present, BofA took improper legal action against military customers for delinquent credit card accounts and overdrafts. Steve Easterbrook, President and Chief Executive Officer, and Pete Bensen, Chief Administrative Officer, will participate in Bernstein’s Strategic Decisions Conference at 8:00 a.m. (Eastern Time) on May 27, 2015. Among other things, the act allows military personnel called to active duty to have their mortgage rates capped at 6% and protects them from nonjudicial foreclosure and repossession. For example, the OCC said that in many cases when the bank filed legal actions against the customers to collect debts, employees signed documents saying they had personal knowledge of the allegations in them when in fact they didn’t. The company provides unmatched convenience in the United States, serving approximately 48 million consumer and small business relationships with approximately 4,800 retail financial centers and approximately 15,900 ATMs and award-winning online banking with 31 million active users and approximately 17 million mobile users.

In trying to collect on debts, the bank’s employees filed affidavits that were said to be based on personal knowledge or a review of records when they were not, according to the O.C.C. The company, on May 26, 2015, reported the further expansion of its specialty branch network with the addition of eight U.S. locations and two in Canada.

The bank did not admit to the O.C.C.’s findings but said that it had been taking steps to improve its monitoring and compliance since it discovered the issues in 2011. “We have taken significant steps over the last several years, and will take further steps now, to ensure we have the right controls and processes in place to meet — and exceed — what is required by law and what our military customers deserve and expect,” Andrew Plepler, Bank of America’s executive for global corporate social responsibility and consumer policy, said in a statement. The United Rentals Pump Solutions branches in Atlanta, Ga., Carlsbad, N.M., Elmwood Park, N.J., Hayward, Calif., Saskatoon, Sask., and Prince George, B.C., will provide fluid transfer solutions for industrial and commercial applications ranging from high volume and high pressure pumps to small, portable units, including custom fabrication.

Seven research analysts have rated the stock with a hold rating, eleven have assigned a buy rating and one has issued a strong buy rating to the company. The Company is a financial institution, serving individual consumers, small and middle market businesses, institutional investors, large corporations and governments with a range of banking, investing, asset management and other financial and risk management products and services.

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