- The CFPB and Bank of America have reached a settlement to resolve allegations that Bank of America—the nation’s second largest retail bank—illegally processed out-of-state garnishment orders and misled consumers regarding their rights concerning application of those orders, in violation of the Consumer Financial Protection Act of 2010.
- According to the CFPB, Bank of America improperly processed at least 3,700 garnishment notices from out-of-state creditors between 2011 and 2022 pursuant to the law of the issuing state (rather than the state in which the customer resided), resulting in $592,000 in garnishment fees to affected customers, and unlawfully included language in customer contracts waiving or limiting their rights to challenge these garnishments.
- Under the terms of the consent order, Bank of America will pay a civil money penalty of $10 million, refund garnishment fees to affected consumers, and must revise their internal processes for handling out-of-state garnishments, and revise customer contracts to eliminate language limiting customers’ rights to challenge garnishments, among other things.