In a dramatic unfolding of events reminiscent of a regulatory David and Goliath, the Consumer Financial Protection Bureau (CFPB) has imposed a monumental $12 million penalty on Bank of America. This action comes after revelations that the financial giant skirted critical mortgage disclosure requirements between 2016 and 2020.
BofA Hit With $12M CFPB Fine : A Tale of Omission and Commission
The CFPB unearthed that a host of Bank of America’s loan officers, numbering in the hundreds, systematically bypassed a crucial step in the mortgage application process. Under the Home Mortgage Disclosure Act (HMDA), these officers were obligated to gather specific demographic data from mortgage applicants. However, in a twist of defiance, they not only neglected this duty but also falsely claimed that applicants had opted not to divulge this information.
Breaking the Law: A Dire Miscalculation
Rohit Chopra, the CFPB Director, expressed stark disappointment in Bank of America’s actions, likening them to a flagrant violation of a federal law that has stood the test of time, meticulously observed by thousands of mortgage lenders over decades. “It is illegal to report false information to federal regulators,” Chopra stated, underlining the gravity of the bank’s misconduct. The CFPB has hinted at further measures to ensure the banking behemoth realigns with legal standards.
The Cost of Compliance: A $12 Million Lesson
In a response that mirrored a strategic chess move, Bank of America agreed to shoulder the hefty $12 million civil money penalty, albeit without conceding to the CFPB’s allegations. The bank also consented to an order that compels it to bolster its compliance mechanisms with the HMDA. This includes meticulous recording and periodic audits of mortgage applications conducted via phone, heralding a new era of oversight and transparency in its operations.
