Fines will go into relief fund.
Bank of America Corp. agreed to pay $12 million in fines for submitting false mortgage-lending information to the US government, regulators said.
From early 2016 through late 2020, some of the bank’s loan officers failed to ask mortgage applicants for their race, ethnicity and sex, as required under federal law, and then falsely recorded that the customers declined to provide the information, the Consumer Financial Protection Bureau said in a statement Tuesday. The fines will go into the bureau’s victim-relief fund, according to a consent order.
“Bank of America violated a federal law that thousands of mortgage lenders have routinely followed for decades,” CFPB Director Rohit Chopra said in the statement. “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, the second-largest US bank by assets, said in an emailed statement that it “properly collected demographic data in more than 99% 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.”
After receiving one complaint in 2020, Bank of America conducted a review and notified the government, which prompted the inquiry from regulators, the Charlotte North Carolina-based lender said. It then 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 bank said in the statement, noting that the data collection issue had no impact on applications.
The company didn’t admit to or deny the allegations as part of the settlement.
The regulatory penalty from the CFPB follows a recent $250 million fine in July over extra fees and unauthorized costs to consumers. A year earlier, the lender was fined $225 million for unfair and deceptive practices related to a prepaid-card program to distribute unemployment insurance and other public-benefit payments during the pandemic. It was also ordered last year to pay a $10 million penalty and repay fees that the lender charged customers when garnishing wages.
As of June, Bank of America was the nation’s 17th-largest home-loan provider in terms of volume, according to Inside Mortgage Finance data. The CFPB has targeted a bevy of other mortgage lenders in enforcement actions involving alleged errors in data reporting. The agency sued Freedom Mortgage Corp. in October, alleging the home-loan originator and servicer intentionally misreported mortgage data.
The agency uses annually submitted Home Mortgage Disclosure Act data on the race, income and other demographics of home-loan applicants to monitor mortgage providers for discrimination. Much of the data is also made publicly available.