The US Consumer Financial Protection Bureau (CFPB) imposed the fine, as hundreds of Bank of America’s loan officers failed to ask mortgage applicants certain demographic questions, but falsely reported that the applicants declined to respond
Bank of America branch in Los Angeles. (Credit: Coolcaesar at the English-language Wikipedia)
Bank of America has agreed to pay a $12m fine to resolve the US regulatory charges for submitting inaccurate information about mortgage loan applicants to the federal government.
The fine was imposed by the US Consumer Financial Protection Bureau (CFPB).
According to the CFPB, hundreds of loan officers at the US-based bank were found violating the Home Mortgage Disclosure Act (HMDA) 1975, for at least four years between 2016 and 2021.
The loan officers failed to ask mortgage applicants certain demographic questions, as required under federal law and falsely reported that the applicants had chosen not to respond.
CFPB imposed the fine under the Consumer Financial Protection Act (CFPA), and the fine amount will be credited to the bureau’s victims’ relief fund.
CFPB director Rohit Chopra said: “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.”
The HMDA Act requires mortgage lenders to report demographic data about mortgage applications and originations to the CFPB and other federal regulators.
The data collected is a comprehensive source of publicly available US mortgage market data.
It can be used by the public and regulators to check whether the financial institutions are serving the housing needs of communities and identify potential discriminatory lending patterns.
CFPB’s review of HMDA data collection practices found that the bank was submitting false data, including falsely reporting that applicants declined to provide information.
Hundreds of loan officers at Bank of America reported that all the mortgage applicants chose not to provide their demographic data over at least a three-month period.
The loan officers did not ask applicants for demographic data but falsely reported that the applicants declined to provide the information.
CFPB has taken several actions against Bank of America in the past, for violating federal law.
Last year, CFPB and OCC fined Bank of America $225m to refund hundreds of millions of dollars to consumers for botched disbursement of state unemployment benefits.
The bank also paid a $10m penalty for unlawful garnishments of customer accounts.
In July this year, CFPB and OCC fined Bank of America $200m for illegally charging junk fees, withholding credit card rewards, and opening fake accounts.