Bank of America Fined $30 Million by OCC, Related to SCRA and Debt Collection Litigation

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On Friday the Office of the Comptroller of the Currency (OCC) assessed a $30 million civil money penalty against Bank of America, National Association (BOA), and ordered remediation to approximately 73,000 affected customer accounts.

The OCC took the actions against the bank for violations of law and unsafe or unsound practices in connection with the bank’s compliance with the Servicemembers Civil Relief Act (SCRA), and unsafe or unsound practices in connection with debt collection litigation practices.

Pursuant to the OCC press release: “The enforcement action is intended to correct deficiencies in the bank’s practices and procedures related to its SCRA-compliance program and to address the preparation and notarization of affidavits and other sworn documents used in the bank’s debt collection litigation.”

The OCC investigation resulted in two separate Consent Orders.  A Consent Order is the result of the parties mutually agreeing to the terms of a settlement of an enforcement proceeding. Both Orders were signed by all members of board of the bank.

The first Order outlines the Civil Money Penalty of $30 Million.

The second Order goes into greater detail on the OCC findings and outlines steps the bank must take going forward. Among the requirements:

1)      The bank must appoint and maintain a compliance committee

2)      The bank must create and submit for approval a comprehensive action plan to achieve compliance with the Order.

3)      The bank must create a written compliance risk management plan.

4)      The bank must conduct a SCRA risk assessment and create a written SCRA risk management and compliance plan.

5)      The bank must conduct an internal audit to review all SCRA eligible accounts between October 1, 2006 and the date of the Order for SCRA compliance and submit a remediation plan for problem accounts.

The Orders indicate that “the bank has begun corrective action, and is committed to taking all necessary and appropriate steps to remedy the deficiencies, unsafe or unsound practices, and violations of law identified by the OCC, and to enhance the bank’s SCRA compliance practices and sworn document and collections litigation practices.”

With this action, over the past 15 months BOA has been the subject of two separate federal regulatory enforcement proceedings.  In April of 2014 insideARM reported on a CFPB Consent Order related to the bank’s credit card add-on products.

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Posted in Collection Laws and Regulations, Credit Card Accounts Receivable, Credit Grantors, Debt Collection, Debt Recovery, Featured Post .

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