Actions BofA must take over botching of unemployment benefits card program detailed

Details of the cease and desist (C&D) order the Office of the Comptroller of the Currency (OCC) issued July 14 against Bank of America, over its administration of prepaid cards for unemployment benefits in several states, were made available Thursday by the agency.

The OCC said the issuance of a notice of charges was related to the bank’s administration of prepaid cards for unemployment benefits, which earned the bank a $125 million fine from the agency over charges that the bank botched disbursement of state unemployment benefits at the height of the coronavirus crisis. The Consumer Financial Protection Bureau (CFPB) separately fined the bank $100 million over the same program.

According the CFPB, the bank “automatically and unlawfully” froze people’s accounts with a faulty fraud detection program, and then gave those persons little recourse when there was no fraud.

Among other things, the OCC’s order requires the bank to take at least two actions, one establishing a committee dedicated to oversight and risk management of its unemployment prepaid cards, the other developing a “Consent Order Action Plan” containing a complete description of the actions necessary to comply with the OCC’s orders.

The bank is also charged with establishing an “enterprise-wide complaints risk management framework” aimed at developing “an effective enterprise complaints policy, inclusive of an expanded complaints definition, and the identification and description of effective procedures for adequately and timely identifying, tracking, documenting, analyzing, managing, monitoring, escalating, reporting, and resolving consumer customer complaints.”

OCC Enforcement Actions and Terminations

Be the first to comment

Leave a Reply

Your email address will not be published.