Bank of America, N.A.
Documents in this case
Case summary
On July 11, 2023, the Bureau issued an order against Bank of America, N.A., which is a depository institution based in Charlotte, North Carolina to address the Bureau’s findings regarding the bank’s opening unauthorized consumer financial accounts and its misleading statements regarding certain credit cards rewards. Specifically, the Bureau found that in certain instances Bank of America opened credit card accounts without consumer consent and in doing so, obtained consumer credit reports without a permissible purpose, in violation of the Truth in Lending Act and its implementing regulation, the Fair Credit Reporting Act, and the Consumer Financial Protection Act of 2010. The Bureau further found that Bank of America engaged in deceptive acts or practices by: (a) advertising a sign-up bonus for a rewards card on its website, making it appear it was available to all applicants, but later denying the bonus to consumers who applied over the phone or in person and not online; and (b) offering a sign-up bonus for a rewards card to certain consumers but then failing to provide them the promised bonuses due to employee error. The order requires the Bank to come into compliance, pay redress to consumers and verify previously administered redress, and pay a $30 million civil money penalty.
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UNITED STATES OF AMERICA CONSUMER FINANCIAL PROTECTION BUREAU ADMINISTRATIVE PROCEEDING File No. 2023-CFPB-0007 In the Matter of:
BANK OF AMERICA, N.A., CONSENT ORDER The Consumer Financial Protection Bureau (Bureau) has identified the following violations of law by Bank of America, N.A. (Bank, or Respondent, as defined below): (i) with respect to promotional bonus offers on rewards credit cards, Respondent created the deceptive net impression that bonuses linked to rewards credit cards were available to all consumers when those bonuses were only available to consumers who applied online, and denied bonuses to certain targeted consumers who applied in-person and over the phone; and (ii) with respect to offering consumer credit card accounts, in some instances, Respondent applied for and opened credit cards for consumers without their consent and obtained consumer reports for those consumers without a permissible purpose. The Bureau has concluded that Respondent’s acts or practices violated the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq., and its implementing regulation, Regulation Z, 12 C.F.R. part 1026; the Fair Credit Reporting Act 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 1 of 33
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(FCRA), 15 U.S.C. §§ 1681b(f); and the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531 and 5536. The Bureau issues this Consent Order under §§ 1053 and 1055 of the CFPA.
I.
Jurisdiction 1.
The Bureau has jurisdiction over this matter under §§ 1053 and 1055 of the CFPA, 12 U.S.C. §§ 5563 and 5565.
II.
Stipulation 2.
Respondent has executed a “Stipulation and Consent to the Issuance of a Consent Order,” dated June 28, 2023 (Stipulation), which is incorporated by reference and is accepted by the Bureau. By this Stipulation, Respondent has consented to the issuance of this Consent Order by the Bureau under §§ 1053 and 1055 of the CFPA, 12 U.S.C. §§ 5563, 5565, without admitting or denying any of the findings of fact or conclusions of law, except that Respondent admits the facts necessary to establish the Bureau’s jurisdiction over Respondent and the subject matter of this action.
III.
Definitions 3.
The following definitions apply to this Consent Order: 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 2 of 33
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a.
“Account-Opening Affected Consumers” means consumers who may have been negatively impacted by Relevant Account-Opening Practices during the Account-Opening Notice Period and who have not previously received redress.
b.
“Account-Opening Findings Period” is from January 1, 2012, through December 31, 2020.
c.
“Account-Opening Notice Period” is from January 1, 2015, through December 31, 2021.
d.
“Board” means Respondent’s duly-elected and acting Board of Directors or a committee thereof.
e.
“Consumer Financial Product or Service” is defined in 12 U.S.C. § 5481 and means any financial product or service that is described in one or more categories under— (A) paragraph (15) of 12 U.S.C. § 5481 and is offered or provided for use by consumers primarily for personal, family, or household purposes; or (B) clause (i), (v), (vii), (ix), or (x) of paragraph (15)(A) of 12 U.S.C. § 5481, and is delivered, offered, or provided in connection with a consumer financial product or service referred to in 12 U.S.C. § 5481(5)(A). f.
“Consumer Reporting Agency” means a Consumer Reporting Agency as defined by 15 U.S.C. § 1681a(f).
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g.
“Effective Date” means the date on which the Consent Order is entered on the administrative docket.
h.
“Enforcement Director” means the Assistant Director of the Office of Enforcement for the Consumer Financial Protection Bureau, or his or her delegate.
i.
“Regional Director” means the Regional Director for the Southeast Region for the Office of Supervision for the Consumer Financial Protection Bureau, or his or her delegate. j.
“Related Consumer Action” means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency brought against Respondent based on substantially the same facts as described in Section IV of this Consent Order.
k.
“Relevant Account-Opening Practices” means submitting applications on behalf of, opening, issuing, activating, or enrolling a consumer in credit cards without the consumer’s consent. l.
“Remediated Rewards Consumers” means consumers to whom the Bank previously paid or provided approximately $23 million in redress, in the form of adjustments to their rewards accounts, 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 4 of 33
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statement credits, or refund checks, related to Rewards Card Bonus Practices.
m.
“Respondent” means Bank of America, N.A., and its successors and assigns.
n.
“Rewards Card Bonus Practices” means the advertising or promotion of Rewards Cards and Sign-Up Bonuses in connection with Rewards Cards, representations made about the terms and features of Rewards Cards, enrolling consumers in Rewards Cards, and providing advertised or promised features of Rewards Cards including Sign-Up Bonuses, from January 1, 2012, through February 28, 2021. o.
“Rewards Cards” means credit card products that provide consumers with cash or points as rewards for using the credit card. p.
“Rewards Consumers” means consumers who were potentially subjected to Rewards Card Bonus Practices, and are not Remediated Rewards Consumers.
q.
“Sign-Up Bonus” means an additional cash or points bonus for new cardholders who signed up for a Rewards Card and achieved certain spending limits.
r.
“Targeted Consumers” means consumers, beginning in 2013, to whom Respondent offered the opportunity to apply for a Rewards 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 5 of 33
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Card with a Sign-Up Bonus when the consumer called Respondent or visited one of its branches.
IV.
Bureau Findings and Conclusions The Bureau finds the following:
4.
Respondent is a national bank headquartered in Charlotte, North Carolina, with branches and ATMs located in 38 states and the District of Columbia. In September 2022, Respondent had over $3.1 trillion in total assets, which makes it an insured depository institution with assets greater than $10 billion within the meaning of 12 U.S.C. § 5515(a). 5.
Respondent operates more than 3,900 full-service bank branches nationwide, through which it offers deposit and credit products. 6.
Respondent is a “covered person” under 12 U.S.C. § 5481(6). Respondent’s Violations of Law Regarding Online Advertisements of Rewards Cards and Sign-Up Bonuses 7.
From January 1, 2012, through February 28, 2021, Respondent advertised the use of the Rewards Cards by offering a Sign-Up Bonus. 8.
At various times from January 1, 2012, through February 28, 2021, Respondent advertised Sign-Up Bonuses on its website. Advertisements in 2019, for example, offered consumers a “$200 online cash rewards bonus offer” for the “Bank of America Cash Rewards” card; a “50,000 online bonus points offer (a 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 6 of 33
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$500 value)” for the “Bank of America Premium Rewards” card; and a “25,000 online bonus points offer (a $250 value)” for the “Bank of America Travel Rewards” card.
9.
Some of the website advertisements, including the online terms and conditions, did not expressly state that the Sign-Up Bonus offers were limited to online applications.
10.
Some consumers reasonably interpreted the word “online” contained in the advertisements for an “online cash rewards bonus offer” or an “online bonus points offer” to refer only to the fact that the advertisement itself was “online” – and not necessarily that the consumer could only earn a Sign-Up Bonus if he or she applied for a Rewards Card online.
11.
Respondent thus created the misleading net impression that the Sign- Up Bonus offers were available to all applicants, including those who applied inperson or via phone call.
12.
The promised Sign-Up Bonuses were material to some consumers because these are an important characteristic of the Rewards Card being offered in conjunction with the Sign-Up Bonus.
13.
Respondent did not provide Sign-Up Bonuses to some consumers who sought the Sign-Up Bonus, but did not apply for the Rewards Card online. 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 7 of 33
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14.
Section 1036(a)(1)(B) of the CFPA prohibits “unfair, deceptive, or abusive” acts or practices. 12 U.S.C. § 5536(a)(1)(B). 15.
These website advertisements created false or misleading net impressions in instances where the Bank did not provide Sign-Up Bonuses to consumers who responded to the advertisement and opened a Rewards Card account over the telephone or in person and thereafter met the spending requirement.
Respondent’s Violations of Law Regarding Targeted Promotions of Rewards Cards and Sign-Up Bonuses 16.
In 2013, Respondent began targeting certain consumers to be invited to apply for a Rewards Card with a Sign-Up Bonus when they called Respondent or visited one of its branches.
17.
These Targeted Consumers usually received the targeted offer from Respondent’s employees. If the consumer was interested in the offered Rewards Card, Respondent’s associate was required to conduct a multiple-step manual process to allow the consumer to apply for a Rewards Card account with a Sign-Up Bonus.
18.
Some consumers who were specifically targeted for a particular Rewards Card with Sign-Up Bonus offer, and signed up in-person or via phone call, were ultimately not given the advertised Sign-Up Bonus because Respondent’s employees did not accurately complete the application process. 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 8 of 33
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19.
Respondent was aware that some Targeted Consumers were seeking enrollment in Rewards Cards with Sign-Up Bonuses and that it was simultaneously failing to provide the Sign-Up Bonuses due to the manner in which some employees processed the applications.
20.
Some consumers reasonably understood Respondent’s oral representations that they were eligible to apply for a Rewards Card with a Sign-Up Bonus to mean that they would receive a Sign-Up Bonus when they signed up for a Rewards Card and met the spending requirements. 21.
Respondent’s representations were material to some consumers because they were likely to affect a consumer’s decision to sign up for the offered Rewards Card.
22.
Section 1036(a)(1)(B) of the CFPA prohibits “unfair, deceptive, or abusive” acts or practices. 12 U.S.C. § 5536(a)(1)(B). 23.
Respondent engaged in a deceptive act or practice by promising Sign- Up Bonuses to certain Targeted Consumers who signed up for the Rewards Card, and met the required spending amount, but failing to provide those consumers with the promised Sign-Up Bonus.
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Respondent’s Violations of Law Regarding Account-Opening Practices 24.
During the Account-Opening Findings Period, Respondent offered an array of Consumer Financial Products or Services, including savings and checking accounts (deposit accounts) and credit cards. 25.
During the Account-Opening Findings Period, one factor that Respondent considered when evaluating financial center employees’ overall performance and incentive compensation was the number of new Consumer Financial Products or Services that were opened and used by the consumer. 26.
During the Account-Opening Findings Period, in response to sales pressure or to obtain incentive rewards, Respondent’s employees sometimes submitted applications for and issued credit cards without consumers’ consent. These acts or practices were contrary to Respondent’s policies and procedures and involved a small percentage of Respondent’s new accounts. 27.
It was Respondent’s practice to obtain consumer reports in the course of considering consumers for new credit cards. 28.
Respondent used or obtained consumer reports to consider consumers for new credit cards even when the consumers had not applied for or did not want the products and where Respondent did not otherwise have a permissible purpose for the consumer reports.
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29.
During the Account-Opening Findings Period, Respondent sometimes generated associated fees from credit card accounts opened without consumers’ consent.
30.
Respondent’s acts or practices described herein may have negatively impacted consumers including through fees charged; impacts to consumer credit profiles; the loss of control over personal identifying information; the expenditure of consumer time and effort investigating the facts and seeking closure of unwanted accounts; and the need to monitor and mitigate harm going forward. 31.
Respondent has addressed a root cause of Relevant Account-Opening Practices—individual sales goals and sales-based compensation—by eliminating sales goals both for compensation incentives and for performance management for financial center employees primarily responsible for the sale of consumer credit card accounts as of January 1, 2023.
Respondent’s Violations of TILA 32.
Under TILA, “no credit card shall be issued except in response to a request or application therefor.” 15 U.S.C. § 1642. Regulation Z requires that no credit card shall be issued to any person except in response to an oral or written 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 11 of 33
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request or application for the card; or as a renewal of, or substitute for, an accepted credit card. 12 C.F.R. § 1026.12(a).
33.
By issuing credit cards to consumers without the consumers’ consent and not in response to an oral or written request or application for the card or as a renewal of, or substitute for, an accepted credit card, Respondent violated TILA and Regulation Z, 15 U.S.C. § 1642; 12 C.F.R. § 1026.12(a). Respondent’s Violations of FCRA 34.
Section 604(f) of FCRA mandates that consumer reports be used or obtained only for permissible purposes enumerated in the statute. 15 U.S.C. § 1681b(f).
35.
Under FCRA, a “person shall not use or obtain a consumer report for any purpose unless—(1) the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished” and one other condition is met. 15 U.S.C. § 1681b(f).
36.
The authorized purposes specified in FCRA include consumer reports furnished “in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer.” 15 U.S.C. § 1681b(a)(3)(A). 37.
By using or obtaining consumer reports without a permissible purpose, Respondent violated § 604(f) of FCRA, 15 U.S.C. § 1681b(f). 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 12 of 33
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Respondent’s Violations of the CFPA 38.
Under § 1036(a)(1)(A) of the CFPA, it is unlawful for covered persons to “offer or provide to a consumer any financial product or service not in conformity with Federal consumer financial law, or otherwise commit any act or omission in violation of a Federal consumer financial law.” 12 U.S.C. § 5536(a)(1)(A).
39.
By violating TILA, and FCRA, Respondent committed acts or omissions in violation of Federal consumer financial laws. Accordingly, Respondent violated § 1036(a)(1)(A) of the CFPA. 12 U.S.C. § 5536(a)(1)(A). CONDUCT PROVISIONS V.
Prohibited Conduct
IT IS ORDERED, under §§ 1053 and 1055 of the CFPA, that: 40.
Respondent and its officers, agents, servants, employees, and attorneys who have actual notice of this Consent Order, in connection with Rewards Card Bonus Practices (as defined but without regard to a time period limitation), whether acting directly or indirectly, may not violate sections 1031 and 1036 of the CFPA, 12 U.S.C. §§ 5531 and 5536, including by: a.
Failing to disclose material limitations to the availability or terms and conditions of any Rewards Card; and 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 13 of 33
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b.
Failing to provide benefits to consumers as advertised. 41.
Respondent and its officers, agents, servants, and employees and attorneys, who have actual notice of this Consent Order, in connection with the Relevant Account-Opening Practices, whether acting directly or indirectly, may not violate sections 1031 and 1036 of the CFPA, 12 U.S.C. §§ 5531 and 5536; TILA, 15 U.S.C. § 1601 et seq., and its implementing regulation, Regulation Z, 12 C.F.R. part 1026; or FCRA, 15 U.S.C. § 1681b(f) by opening credit cards without the consumer’s consent.
Required Conduct 42.
Respondent has ceased using sales goals and, for 3 years after the Effective Date, agrees not to use sales goals either for compensation or for performance management to incentivize its financial center employees who are primarily responsible for the opening of consumer credit cards. 43.
Respondent must implement, if not already implemented, and maintain policies and procedures that:
a.
Ensure, for all Rewards Card advertisements, adequate disclosure of any limitations on the advertised bonus or reward; b.
Are designed to accurately and consistently provide rewards program benefits as advertised when enrolling consumers for Rewards Cards; 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 14 of 33
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c.
Collect and retain evidence demonstrating that a consumer has authorized the application, issuance, or opening of any Consumer Financial Product or Service; and d.
Are designed to ensure that Respondent (i) appropriately handles consumer inquiries or complaints concerning Relevant Account- Opening Practices, (ii) appropriately handles employee inquiries, concerns, or complaints concerning sales pressure or Relevant Account-Opening Practices, (iii) tracks and addresses indicia of Relevant Account-Opening Practices, and (iv) provides employee training reasonably designed to prevent Relevant Account-Opening Practices.
VI.
Compliance Plan IT IS FURTHER ORDERED that:
44.
Within 90 days of the Effective Date, Respondent must draft, implement, and maintain a comprehensive compliance plan designed to ensure that Respondent’s conduct regarding applying for and opening credit card accounts and Respondent’s advertisement and promotions of Rewards Cards comply with all applicable Federal consumer financial laws and the terms of this Consent Order (Compliance Plan). The Compliance Plan must include, at a minimum: 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 15 of 33
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a.
detailed steps Respondent has taken or will take to address each action required by this Consent Order;
b.
a mechanism to ensure that the Board is kept apprised of the status of compliance actions; and c.
specific timeframes and deadlines for implementation of the steps described above, if not already implemented. 45.
Respondent must provide the Compliance Plan to the Bureau upon request.
VII.
Role of the Board IT IS FURTHER ORDERED that:
46.
Respondent’s Board must review all plans, reports, and submissions (including Compliance plans, Compliance reports, programs, policies, and procedures) required by this Consent Order, including prior to submission to the Bureau.
47.
The Board will have the ultimate responsibility for proper and sound management of Respondent and for ensuring that Respondent complies with the laws that the Bureau enforces, including Federal consumer financial laws and this Consent Order.
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48.
In each instance that this Consent Order requires the Board to ensure adherence to, or perform certain obligations of Respondent, the Board must: a.
Authorize whatever actions are necessary for Respondent to fully comply with the Consent Order;
b.
Require timely reporting by management to the Board on the status of compliance obligations; and c.
Require timely and appropriate corrective action to remedy any material non-compliance with Board directives related to this Section.
MONETARY PROVISIONS VIII.
Order on Redress and Requiring Audit IT IS FURTHER ORDERED that:
a.
Rewards Consumers 49.
Respondent has previously identified and provided redress to Remediated Rewards Consumers.
50.
Within 45 days of the Effective Date, Respondent must conduct a comprehensive review to determine (1) whether there are Targeted Consumers who signed up for a Rewards Card, and met the required spending requirement, but did not receive the Sign-Up bonus, and who were not previously remediated, and 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 17 of 33
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(2) the completeness of the redress provided to Remediated Rewards Consumers. This review may be conducted by Respondent’s independent corporate audit function or a third-party consultant.
51.
If Respondent identifies additional redress that should be provided to consumers as a result of the review described in paragraph 50 or otherwise, Respondent must provide redress to affected consumers prior to submitting the Remediation Report described in paragraph 52.
52.
Within 90 days of the Effective Date, Respondent must submit to the Regional Director a Remediation and Audit Report (Remediation Report) that describes in detail all steps Respondent took or is taking to comply with paragraph 50, including the results of its review and how any additional redress was provided or is being provided as a result of the review(s). 53.
To the extent Respondent has already complied with paragraphs 50- 52, in whole or in part, no additional action is required with respect to the actions already completed. Respondent may rely on previous materials reported to the Regional Director (and the basis for such materials) to evidence its completion of any of the requirements of paragraphs 50-52.
54.
Respondent may not condition the payment of any redress to any Rewards Consumer under this Consent Order on that Rewards Consumer waiving any right.
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b.
Account-Opening Affected Consumers 55.
Within 30 days of the Effective Date, Respondent must submit to the Regional Director for review and non-objection a comprehensive written plan for providing redress to Account-Opening Affected Consumers consistent with this Consent Order (Redress Plan). The Redress Plan must, at a minimum: a.
Use data analytics and other methods available to reasonably identify Account-Opening Affected Consumers;
b.
Provide redress to Account-Opening Affected Consumers. The Redress Plan must also describe the redress amounts Respondent will provide to Account-Opening Affected Consumers and include and describe procedures for the Respondent to support and provide to the Bureau any determination made by the Respondent that providing redress to particular Account-Opening Affected Consumers is impracticable.
c.
Request deletion of all tradelines associated with the accounts that resulted in individuals being classified as Account-Opening Affected Consumers.
d.
Detail how Respondent will locate Account-Opening Affected Consumers for payment of redress and the steps Respondent will take 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 19 of 33
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with respect to consumers whose redress payments are returned as undeliverable or not cashed within a prescribed time. e.
Provide the Bureau with a copy of the form of the letter or notice that will be sent to Account-Opening Affected Consumers notifying them of any redress and, if applicable, offering to close the products or end the services without fees or penalties.
56.
Within 180 days after completing the Redress Plan, Respondent’s internal audit department must review and assess compliance with the terms of the Redress Plan and validate that the Redress Plan has been properly executed and must report the results of the review and assessment in a written submission to the Board and to the Regional Director.
57.
Respondent must provide all redress under the Redress Plan within one year of the Regional Director making a determination of non-objection to the Redress Plan, unless the Regional Director grants an extension of that deadline. 58.
Respondent may not condition the payment of any redress to any Account-Opening Affected Consumer under this Consent Order on that Account- Opening Affected Consumer waiving any right. Order to Pay Civil Money Penalty IT IS FURTHER ORDERED that:
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59.
Under § 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the violations of law described in Section IV of this Consent Order, Respondent must pay a civil money penalty of $30,000,000 to the Bureau. 60.
Within 10 days of the Effective Date, Respondent must pay the civil money penalty by wire transfer to the Bureau or to the Bureau’s agent in compliance with the Bureau’s wiring instructions. 61.
The civil money penalty paid under this Consent Order will be deposited in the Civil Penalty Fund of the Bureau as required by § 1017(d) of the CFPA, 12 U.S.C. § 5497(d).
62.
Respondent, for all purposes, must treat the civil money penalty paid under this Consent Order as a penalty paid to the government. Regardless of how the Bureau ultimately uses those funds, Respondent may not: a.
Claim, assert, or apply for a tax deduction, tax credit, or any other tax benefit for any civil money penalty paid under this Consent Order; or b.
Seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made under any insurance policy, with regard to any civil money penalty paid under this Consent Order.
63.
To preserve the deterrent effect of the civil money penalty in any Related Consumer Action, Respondent may not argue that Respondent is entitled 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 21 of 33
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to, nor may Respondent benefit by, any offset or reduction of any compensatory monetary remedies imposed in the Related Consumer Action because of the civil money penalty paid in this action or because of any payment that the Bureau makes from the Civil Penalty Fund. If the court in any Related Consumer Action offsets or otherwise reduces the amount of compensatory monetary remedies imposed against Respondent based on the civil money penalty paid in this action or based on any payment that the Bureau makes from the Civil Penalty Fund, Respondent must, within 30 days after entry of a final order granting such offset or reduction, notify the Bureau, and pay the amount of the offset or reduction to the U.S. Treasury. Such a payment will not be considered an additional civil money penalty and will not change the amount of the civil money penalty imposed in this action.
IX.
Additional Monetary Provisions IT IS FURTHER ORDERED that:
64.
In the event of any default on Respondent’s obligations to make payment under this Consent Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid from the date of default to the date of payment, and will immediately become due and payable. 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 22 of 33
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65.
Respondent must relinquish all dominion, control, and title to the funds paid to the fullest extent permitted by law and no part of the funds may be returned to Respondent.
66.
Under 31 U.S.C. § 7701, Respondent, unless it already has done so, must furnish to the Bureau its taxpayer-identification numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Consent Order.
67.
Within 30 days of the entry of a final judgment, consent order, or settlement in a Related Consumer Action, Respondent must notify the Regional Director of the final judgment, consent order, or settlement in writing. That notification must indicate the amount of redress, if any, that Respondent paid or is required to pay to consumers and describe the consumers or classes of consumers to whom that redress has been or will be paid.
COMPLIANCE PROVISIONS X.
Reporting Requirements IT IS FURTHER ORDERED that:
68.
Respondent must notify the Bureau of any development that may affect compliance obligations arising under this Consent Order, including but not 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 23 of 33
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limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor company; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this Consent Order; the filing of any bankruptcy or insolvency proceeding by or against Respondent; or a change in Respondent’s name or address. Respondent must provide this notice, if practicable, at least 30 days before the development, but in any case no later than 14 days after the development. 69.
Within 7 days of the Effective Date, Respondent must designate at least one telephone number and email, physical, and postal addresses as points of contact that the Bureau may use to communicate with Respondent. 70.
Respondent must report any change in the information required to be submitted under Paragraph 69 at least 30 days before the change or as soon as practicable after the learning about the change, whichever is sooner. 71.
One year after the Effective Date, Respondent must submit to the Regional Director an accurate written compliance progress report (Compliance Report) that has been approved by the Board and sworn to under penalty of perjury, which, at a minimum:
a.
lists each applicable paragraph and subparagraph of the Order and describes in detail the manner and form in which Respondent has 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 24 of 33
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complied with each such paragraph and subparagraph of the Consent Order;
b.
describes in detail the manner and form in which Respondent has complied with the Compliance Plan, Redress Report Plan for Rewards Consumers and Redress Plan for Account-Opening Practices; and c.
attaches a copy of each Order Acknowledgment obtained under Section XI, unless previously submitted to the Bureau. XI.
Order Distribution and Acknowledgment IT IS FURTHER ORDERED that:
72.
Within 7 days of the Effective Date, Respondent must submit to the Regional Director an acknowledgment of receipt of this Consent Order, sworn under penalty of perjury.
73.
Within 30 days of the Effective Date, Respondent must deliver a copy of this Consent Order to each of its Board members and executive officers, as well as to any business leaders and senior managers who have responsibilities related to the subject matter of the Consent Order.
74.
For 5 years from the Effective Date, Respondent must deliver a copy of this Consent Order to any business entity resulting from any change in business structure to any future Board members and executive officers, as well as to any 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 25 of 33
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business leaders and senior managers who have responsibilities related to the subject matter of the Consent Order.
75.
Respondent must secure a signed and dated statement acknowledging receipt of a copy of this Consent Order, ensuring that any electronic signatures comply with the requirements of the E-Sign Act, 15 U.S.C. § 7001 et seq., within 30 days of delivery, from all persons receiving a copy of this Consent Order under this Section.
76.
Ninety days after the Effective Date, Respondent must submit to the Regional Director a list of all persons and their titles to whom this Consent Order was delivered through that date under Paragraphs 73-74 and a copy of all signed and dated statements acknowledging receipt of this Consent Order under Paragraph 75.
XII.
Recordkeeping IT IS FURTHER ORDERED that:
77.
Respondent must create and retain the following business records: a.
all documents and records necessary to demonstrate full compliance with each provision of this Consent Order, including all submissions to the Bureau;
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b.
all consumer complaints and refund requests (whether received directly or indirectly, such as through a third party) regarding Respondent’s offering of Sign-up Bonuses for the opening of a Rewards Card;
c.
all documents and records pertaining to the Compliance Plan described in Section VI above and the Remediation Report, described in Section VIII above; and d.
all consumer complaints and refund requests related to the Relevant Account-Opening Practices (whether received directly or indirectly, such as through a third party), and any responses to those complaints or requests.
78.
Respondent must make the documents identified in Paragraph 77 available to the Bureau upon the Bureau’s request.
XIII.
Notices IT IS FURTHER ORDERED that:
79.
Unless otherwise directed in writing by the Bureau, Respondent must provide all submissions, requests, communications, or other documents relating to this Consent Order in writing, with the subject line, “In re Bank of America, N.A., 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 27 of 33
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File No. 2023-CFPB -0007,” and send them by overnight courier or first-class mail to the below address and contemporaneously by email to [email protected]:
Regional Director, CFPB Southeast Region Peachtree Summit Building 401 W. Peachtree Street Atlanta, GA 30308 XV.
Cooperation with the Bureau IT IS FURTHER ORDERED that:
80.
Respondent must cooperate fully to help the Bureau determine the identity and location of, and the amount of injury sustained by, each Account- Opening Affected Consumer. Respondent must provide such information in its or its agents’ possession or control within 14 days of receiving a written request from the Bureau.
XVI.
Compliance Monitoring IT IS FURTHER ORDERED that:
81.
Within 30 days of receipt of a written request from the Bureau, Respondent must submit additional Compliance Reports or other requested 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 28 of 33
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information, which must be made under penalty of perjury; provide sworn testimony; or produce documents.
82.
Respondent must permit Bureau representatives to interview any employee or other person affiliated with Respondent who has agreed to such an interview regarding: (a) this matter; (b) anything related to or associated with the conduct described in Section IV; or (c) compliance with the Consent Order. The person interviewed may have counsel present.
83.
Nothing in this Consent Order will limit the Bureau’s lawful use of civil investigative demands under 12 C.F.R. § 1080.6 or other compulsory process. XVII.
Modifications to Non-Material Requirements IT IS FURTHER ORDERED that:
84.
Respondent may seek a modification to non-material requirements of this Consent Order (e.g., reasonable extensions of time and changes to reporting requirements) by submitting a written request to the Regional Director. 85.
The Regional Director may, in his or her discretion, modify any nonmaterial requirements of this Consent Order (e.g., reasonable extensions of time and changes to reporting requirements) if he or she determines good cause justifies the modification. Any such modification by the Regional Director must be in writing.
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ADMINISTRATIVE PROVISIONS XVIII.
IT IS FURTHER ORDERED that:
86.
The provisions of this Consent Order do not bar, estop, or otherwise prevent the Bureau from taking any other action against Respondent, except as described in Paragraph 87. Further, for the avoidance of doubt, the provisions of this Consent Order do not bar, estop, or otherwise prevent any other person or governmental agency from taking any action against Respondent. 87.
The Bureau releases and discharges Respondent from all potential liability for law violations that the Bureau has or might have asserted based on the practices described in Section IV of this Consent Order, to the extent such practices occurred before the Effective Date and the Bureau knows about them as of the Effective Date. The Bureau may use the practices described in this Consent Order in future enforcement actions against Respondent and its affiliates, including, without limitation, to establish a pattern or practice of violations or the continuation of a pattern or practice of violations or to calculate the amount of any penalty. This release does not preclude or affect any right of the Bureau to determine and ensure compliance with the Consent Order, or to seek penalties for any violations of the Consent Order.
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88.
This Consent Order is intended to be, and will be construed as, a final Consent Order issued under § 1053 of the CFPA, 12 U.S.C. § 5563, and expressly does not form, and may not be construed to form, a contract binding the Bureau or the United States.
89.
This Consent Order will terminate on the later of 5 years from the Effective Date or 5 years from the most recent date that the Bureau initiates an action alleging any violation of the Consent Order by Respondent, if such action is initiated within 5 years of the Effective Date. If such action is dismissed or the relevant adjudicative body rules that Respondent did not violate any provision of the Consent Order, and the dismissal or ruling is either not appealed or upheld on appeal, then the Consent Order will terminate as though the action had never been filed. The Consent Order will remain effective and enforceable until such time, except to the extent that any provisions of this Consent Order have been amended, suspended, waived, or terminated in writing by the Bureau or its designated agent. 90.
Calculation of time limitations will run from the Effective Date and be based on calendar days, unless otherwise noted. Deadlines that fall on a weekend or federal holiday shall carry over to the following business day. 91.
Should Respondent seek to transfer or assign all or part of its operations that are subject to this Consent Order, Respondent must, as a condition 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 31 of 33
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of sale, obtain the written agreement of the transferee or assignee to comply with all applicable provisions of this Consent Order. 92.
The provisions of this Consent Order will be enforceable by the Bureau. For any violation of this Consent Order, the Bureau may impose the maximum amount of civil money penalties allowed under §1055(c) of the CFPA, 12 U.S.C. § 5565(c). In connection with any attempt by the Bureau to enforce this Consent Order in federal district court, the Bureau may serve Respondent wherever Respondent may be found and Respondent may not contest that court’s personal jurisdiction over Respondent.
93.
This Consent Order and the accompanying Stipulation contain the complete agreement between the parties. The parties have made no promises, representations, or warranties other than what is contained in this Consent Order and the accompanying Stipulation. This Consent Order and the accompanying Stipulation supersede any prior oral or written communications, discussions, or understandings.
94.
Nothing in this Consent Order or the accompanying Stipulation may be construed as allowing Respondent, its Board, officers, or employees to violate any law, rule, or regulation.
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IT IS SO ORDERED, this 10th day of July, 2023. Rohit Chopra Director Consumer Financial Protection Bureau 2023-CFPB-0007 Document 1 Filed 07/11/2023 Page 33 of 33
Document ()
PDF of this document (6 pages)
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UNITED STATES OF AMERICA CONSUMER FINANCIAL PROTECTION BUREAU File No. 2023-CFPB-0007 In the Matter of:
BANK OF AMERICA, N.A.
STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER The Consumer Financial Protection Bureau (Bureau) intends to initiate an administrative proceeding against Bank of America, N.A. (Respondent), under 12 U.S.C. §§ 5563 and 5565, (a) for its failure to disclose in online advertisements that certain bonuses linked to rewards credit cards were being offered only to consumers who applied online, and failure to provide rewards card bonuses to certain targeted consumers who applied in-person and over the phone, due to employee error at registration, in violation of the CFPA 's prohibition on unfair, deceptive, or abusive acts or practices, 12 U.S.C. §§ 553 1, 5536; and (b) for applying for and opening credit cards for consumers without their consent and obtaining credit reports for those consumers without a permissible purpose in violation of the Truth in Lending Act (TILA), 15 U.S.C. §§ 1601 et seq., and its implementing regulation, Regulation Z, 12 C.F.R. part 1026; the Fair Credit 2023-CFPB-0007 Document 2 Filed 07/11/2023 Page 1 of 6
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Reporting Act (FCRA), 15 U.S.C. § 168lb(f); and the CFPA's prohibition on violating any other Federal consumer financial law, 12 U.S.C. § 5536(a)(l)(A). Respondent, in the interest of compliance and resolution of the matter, and without admitting or denying any wrongdoing, consents to the issuance of a Consent Order substantially in the form of the one to which this Stipulation and Consent to the Issuance of a Consent Order is attached (Consent Order), and which is incorporated by reference.
In consideration of the above premises, Respondent agrees to the following: Jurisdiction 1.
The Bureau has jurisdiction over this matter under §§ 1053 and 1055 of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5563, 5565.
Consent 2.
Respondent agrees to the issuance of the Consent Order without admitting or denying any of the findings of fact or conclusions oflaw, except that Respondent admits the facts necessary to establish the Bureau's jurisdiction over Respondent and the subject matter of this action. 3.
Respondent agrees that the Consent Order will be deemed an "order issued with the consent of the person concerned" under 12 U.S.C. § 5563(b)(4) and agrees that the Consent Order will become a final order, effective upon its entry on 2023-CFPB-0007 Document 2 Filed 07/11/2023 Page 2 of 6
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the administrative docket, and will be fully enforceable by the Bureau under 12 U.S.C. §§ 5563(d)(l) and 5565.
4.
Respondent voluntarily enters into this Stipulation and Consent to the Issuance of a Consent Order (Stipulation).
5.
The Consent Order resolves only Respondent's potential liability for law violations that the Bureau asserted or might have asserted based on the practices described in Section IV of the Consent Order, to the extent such practices occurred before the Effective Date and the Bureau knows about them as of the Effective Date. Respondent acknowledges that no promise or representation has been made by the Bureau or any employee, agent, or representative of the Bureau, about any liability outside of this action that may have arisen or may arise from the facts underlying this action or immunity from any such liability. 6.
Respondent agrees that the facts described in Section IV of the Consent Order will be taken as true and be given collateral estoppel effect, without further proof, in any proceeding before the Bureau to enforce the Consent Order, or in any subsequent civil litigation by the Bureau to enforce the Consent Order or its rights to any payment or monetary judgment under the Consent Order, such as a non-dischargeability complaint in any bankruptcy case. 2023-CFPB-0007 Document 2 Filed 07/11/2023 Page 3 of 6
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;
7.
The terms and provisions of this Stipulation and the Consent Order will be binding upon, and inure to the benefit of, the parties hereto and their successors in interest.
8.
Respondent agrees that the Bureau may present the Consent Order to the Bureau Director for signature and entry without further notice. Waivers 9.
Respondent, by consenting to this Stipulation, waives: a.
Any right to service of the Consent Order, and agrees that entry of the Consent Order on the administrative docket will constitute notice to Respondent of its terms and conditions;
b.
Any objection to the jurisdiction of the Bureau, including, without limitation, under section 1053 of the CFPA, 12 U.S.C. § 5563; c.
The rights to all hearings under the statutory provisions under which the proceeding is to be or has been instituted; the filing of proposed findings of fact and conclusions of law; proceedings before, and a recommended decision by, a hearing officer; all post-hearing procedures; and any other procedural right available under section 1053 of the CFPA, 12 U.S.C. § 5563, or 12 CFR Part 1081; d.
The right to seek any administrative or judicial review of the Consent Order;
2023-CFPB-0007 Document 2 Filed 07/11/2023 Page 4 of 6
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e.
Any claim for fees, costs or expenses against the Bureau, or any of its agents or employees, and any other governmental entity, related in any way to this enforcement matter or the Consent Order, whether arising under common law or under the terms of any statute, including, but not limited to the Equal Access to Justice Act and the Small Business Regulatory Enforcement Fairness Act of 1996; for these purposes, Respondent agrees that Respondent is not the prevailing party in this action because the parties have reached a good faith settlement;
f.
Any other right to challenge or contest the validity of the Consent Order;
g.
Such provisions of the Bureau's rules or other requirements oflaw as may be construed to prevent any Bureau employee from participating in the preparation of, or advising the Director as to, any order, opinion, finding of fact, or conclusion of law to be entered in connection with this Stipulation or the Consent Order; and h.
Any right to claim bias or prejudgment by the Director based on the 1.
consideration of or discussions concerning settlement of all or any part of the proceeding.
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BANK OF AMERICA, N.A. BY:
v.~ Aron Levine Managing Director, President Preferred Banking, Bank of America, N .A.
June 28, 2023 2023-CFPB-0007 Document 2 Filed 07/11/2023 Page 6 of 6