The Consumer Financial Protection Bureau (CFPB) issued a $12 million penalty against Bank of America for submitting inaccurate mortgage lending information to the federal government.
The consent order issued Tuesday says that for a period of at least four years, Bank of America's loan officers failed to ask certain required demographic questions to mortgage applicants and falsely reported that these applicants had chosen not to respond.
“Bank of America violated a federal law that thousands of mortgage lenders have routinely followed for decades,” said CFPB Director Rohit Chopra. “It is illegal to report false information to federal regulators, and we will be taking additional steps to ensure that Bank of America stops breaking the law.”
By accepting the penalty Bank of America does not admit or deny wrongdoing in the matter, which covers 2016 through 2021.
As a result of not asking for the information from borrowers, the bank violated the Home Mortgage Disclosure Act (HMDA), which mandates mortgage lenders report specific information about loan applications and originations to federal regulators.
"Hundreds of Bank of America loan officers reported that 100% of mortgage applicants chose not to provide their demographic data over at least a three month period. In fact, these loan officers were not asking applicants for demographic data, but instead were falsely recording that the applicants chose not to provide the information," the CFPB said in a press release.
This conduct constitutes a violation of HMDA and its implementing regulation, Regulation C, as well as the Consumer Financial Protection Act.
The CFPB has ordered Bank of America to pay the $12 million penalty to the CFPB's victims relief fund and to take corrective measures to prevent further violations. This enforcement action comes on the heels of other penalties imposed on Bank of America by the CFPB and other regulatory agencies in recent years, totaling hundreds of millions of dollars, for various violations of consumer financial laws.
Bank of America, one of the largest banks in the United States with $2.4 trillion in assets as of June 2023, is required to adhere to federal laws and regulations. The Home Mortgage Disclosure Act and its data collection requirements serve as a tool for monitoring lending practices and identifying potential discriminatory lending patterns within the housing market.
