Bank of America has agreed to pay 12 million dollars to U.S. authorities after a finding that it provided misleading information about mortgage underwriting and reporting. The Consumer Financial Protection Bureau (CFPB) announced the settlement on a Tuesday, detailing how the bank’s practices misrepresented data tied to mortgage applicants.
CFPB Director Rohit Chopra stated that the agency, the second-largest in the country, found a violation of federal law that has guided mortgage lenders for decades. The bureau noted that Bank of America employees, by organizational design, avoided collecting certain basic demographic data, including race and gender, in some cases. In those instances, this information was not included in required reports, and it is alleged that the bank did not provide these details when asked.
The CFPB stressed that demographic data play a crucial role in monitoring how financial institutions respond to housing needs within communities and in identifying potential patterns of discriminatory lending. This data collection is seen as a tool for safeguarding fair lending practices and ensuring accountability in mortgage markets.
The agency also accused the bank of ignoring the seriousness of the problem. According to the CFPB, by 2013 some employees were aware that the information collected during phone conversations with mortgage applicants was not accurate, yet no corrective steps were taken at the time.
The financial penalty is designated to the bureau’s victim fund, which supports efforts to compensate individuals affected by violations. Bank of America faces this enforcement action as part of a broader pattern of regulatory scrutiny. Earlier in the year, the bank was required to pay a separate penalty of 200 million dollars in connection with allegations of charging excessive interest rates and the creation of unauthorized bank accounts. These actions underscore the ongoing attention regulators are giving to consumer protections and transparent reporting within mortgage lending practices.