June 1, 2015
Bank of America (BoA) has been ordered by the Office of the Comptroller of the Currency (OCC) to pay $30 million in fines over “numerous violations related to the accounts of 73,000 military service members.”
Last year, the OCC announced their discovery of $25 million in penalties against BoA and FIA Card Services because $459.5 million was illegally charged to 1.9 million customers.
The OCC charged BoA in violating the service member’s rights while simultaneously “failing to establish safeguard to ensure that [BoA] was complying with laws in place to ease financial pressures on military members.”
In the OCC consent order, BoA has to not only pay their fines but “bolster its oversight of military member accounts to help prevent further violations of the Servicemembers Civil Relief Act(SCRA).”
The SCRA limits the interest charges of a bank when applied to military overseas. Included in the law is a prohibition of lenders from repossessing cars and foreclosing on homes of service men and women without a court order.
BoA said in a statement that the order pertains to “a small percentage” of credit card and deposit overdraft customers.
However, BoA was found to be openly acting as lender and collector; as well as improperly using debt collection procedures against military members and their families.
Based on “personal knowledge”, BoA employees failed to review customer records before trying to collect on alleged debts.
While BoA has not publicly admitted to the OCC’s allegations, they claim that steps are being taken “to improve monitoring and compliance” since the issue was uncovered back in 2011.
Two years ago, BoA was ordered by the Department of Justice (DoJ) to repay military members for “improperly” foreclosing on homes between 2006 and 2010.
One hundred and forty-two military service men and women were to receive payments under the original 2011 agreement with the bank. During an investigation into these foreclosures, 155 additional military homeowners.
In total 300 military members were victimized by BoA.
BoA is one of several banks who have foreclosed on homes of military service men and women.
Other banks include:
• JPMorgan Chase Bank
• Wells Fargo
• Citi and Residential Lending
• BAC Home Loans Servicing (a.k.a Countrywide)
• GMAC Mortgage
• Ally Financial
Attorney General Stuart Delery explained: “These unlawful judicial foreclosures forced hundreds of service members and their families out of their homes. While this compensation will provide a measure of relief, the fact is that service members should never have to worry about losing their home to an illegal foreclosure while they are serving our country. The department will continue to actively protect our service members and their families from such unjust actions.”