Bank of America, N.A.
On May 4, 2022, the Bureau issued a consent order against Bank of America, N.A., an insured depository institution, to address Bank of America’s processing of garnishment notices. A garnishment notice is a notice issued by a court or judgment creditor directing a financial institution to freeze and then turn over a consumer’s funds to pay off a court-ordered debt. The Bureau found that Bank of America engaged in unfair and deceptive acts and practices in violation of the Consumer Financial Protection Act of 2010. Specifically, Bank of America unfairly required consumers to waive its liability as to consumers’ garnishment-related protections in its deposit agreement and misrepresented to consumers that they could not go to court to attempt to prevent wrongful garnishments. This conduct violated the CFPA. The Bureau also found that Bank of America failed to disclose to courts in states that restricted the garnishment of out-of-state accounts that the garnishment notice pertained to bank accounts located out-of-state; and Bank of America froze accounts and sent funds to creditors even though prohibited by state law. Bank of America also in some instances applied the wrong state’s exemption laws and represented to consumers that their rights to have certain funds exempted from garnishment were governed by the law of the issuing state when in reality the consumer’s own state law applies. The consent order requires Bank of America to refund at least $592,000 in, or cancel, associated unlawful garnishment-related fees and pay a $10 million civil money penalty. The order also requires Bank of America to review and reform its system for processing garnishments, to notify courts or other garnishment issuers when consumer accounts are out-of-state, and to cease using language in its consumer contracts that unlawfully limit consumers’ rights to challenge garnishments.