Bank of America has been ordered to pay out $250,000,000
after federal regulators found that they were engaging in some
bad behavior, basically exploiting their own customers.
The bank had engaged in illegal behavior that violated
the consumer financial protection laws since 2012.
So the CFPB director, the Consumer Financial Protection Bureau director,
Rohit Chopra, said this in a statement.
Bank of America wrongfully withheld credit card rewards,
double-dipped on fees and opened accounts without consent.
These practices are illegal and undermine customer trust.
The CFPB will be putting an end to these practices across the banking system.
Now, keep in mind that the CFPB held Wells Fargo accountable after it was discovered
that that bank was opening accounts for their customers without their consent.
So bank of America was certainly privy to the fines that Wells Fargo paid.
They were privy to the consequences that might arise from their behavior, but
they did it anyway.
And we'll get to why they did it anyway in just a moment.
But first, more details.
The CFPB and the Office of the Comptroller of the Currency found that the bank,
which normally charge customers $35 if their transaction was
declined due to insufficient funds.
Allowed those fees to be repeatedly charged for the same transaction,
resulting in customers being charged tens of millions of dollars in fees
on resubmitted transactions, according to the OCC.
So just to elaborate on that a little further.
Basically what would happen is let's say the account owner doesn't have enough
funds for the transaction, and then the vendor keeps running their card or
running their account to try to make a payment.
Every time they do that, the account owner would be charged $35 by
Bank of America, and they are not supposed to be doing that, okay?
So let me give you more, the OCC said in a statement.
The bank's disclosures did not clearly explain that multiple fees could result
from the same transaction.
Additionally, customers had no ability to know when or
if a merchant would resubmit a transaction to the bank for payment.
And therefore could not reasonably avoid the assessment of multiple fees for
the same transaction.
And so there's a lot more detail I wanna get to, Cenk,
what are your thoughts on this so far?
>> I think this is a super important story for a number of reasons.
First, media and just conventional wisdom mythology,
which usually comes from media, is that the bigger the businesses,
the more legitimate they are and the more credible they are.
No, it turns out there's criminals running these giant businesses because,
number one, you're withholding credit card rewards.
That is a very active, purposeful decision by executives.
We said we would give them rewards.
Do not give it to them, rob them.
Number two, double-dipping on fees.
A very active, purposeful decision.
Hey, charge them twice, even though we shouldn't.
That's theft.
You're just literally taking their money.
You're depositing your money in a bank that at this point,
has admitted they're criminals.
They're thieves, okay?
What is double-dipping?
They say, you're double-dipping.
Okay, no, that's theft.
What do you mean you charged me twice when I wasn't supposed to be charged twice?
So you wanted to rob me of that second charge.
Third thing, open accounts without consent.
Over the top purposeful.
>> Credit card account.
>> Yeah, I didn't ask for a credit card.
You're gonna open it for me and then charge me?
>> No, but think about how sick this is, okay?
Because they would open credit cards on behalf of their customers
without their consent, and they would run their credit.
Every time there's someone does a hard check on your credit,
your credit score goes down, it impacts your credit score.
And this bank was doing this on behalf of these customers without their consent.
Their credit was harmed in the process of doing this.
>> Yeah, so did anybody go to jail?
>> No, of course not.
>> Of course not.
Now, guys, think about this.
And this is a fact, and it's amazing.
If a bank accidentally overpays you, sends you money that's not yours,
and you do not return it, you will go to prison.
But wait a minute, I didn't even do anything wrong.
And sometimes you don't even know that you got money from
the bank that you didn't know or a different company, et cetera.
They pay you money that's not yours, and
if you don't actively return it, you go to prison.
Now, what kind of justice is this?
So meanwhile, they rob millions of their customers.
They're, like, actively make a decision.
Hey, Bob in middle management, I need you to go rob all those people.
Susie in middle management, go rob those people.
Nobody goes to person.
It's not even considered.
None of the stories talk about, like, by the way,
this is not a little bit of theft, right?
My God.
Hey, that guy in the street stole $20.
I mean, look, George Floyd was killed over a potential $20 counterfeit bill.
$20 and he was killed.
These guys are stealing hundreds of millions of dollars, and
then they return a small portion of their proceeds.
>> And that's why they do it.
That's why they do it, right?
Because they've made the calculation.
I mean, this keeps happening with these banks.
Again, Wells Fargo did this not too long ago, right?
Again, opening up accounts on behalf of individuals who did not consent to it,
who did not want it.
Bank of America is doing the same thing.
Because the calculation is, look,
we're gonna make a lot more money than we're going to lose in the fees and
fines that we're gonna have to pay the federal government once we get caught.
Just to give you an idea, their net profit in 2022 alone was $27.5 billion.
Bank of America's profits, not revenue, profits.
In 2022 alone, $27.5 billion.
Billion with a B.
So the $150,000,000 fine that the Consumer Financial Protection Bureau is now
forcing bank of America to pay as a result of this illegal behavior is nothing.
It's a drop in the bucket.
>> It's a rounding error for them guys.
It's a freaking joke on all the rest of us.
So the individual gets screwed.
Media tells you big business is so credible and wonderful,
when in reality, they're the biggest crooks in America.
And then finally, the giant disparity between how big business is treated and
small business is treated.
If a small business, person, a plumber, a dentist, overcharged, double dipped,
created false accounts and stole your money, they're also going to jail.
It's a giant problem, and their business is gonna get shut down.
But when Bank of America does it and Wells Fargo does it, you stole a ton of money.
Why don't you give back 20%?
Keep to 80%.
And by the way, the next time, steal again and again and again, why?
Because you all bribed politicians.
You all give them campaign contributions, that's why.
The last set of criminals are the politicians who pocket those campaign
contributions and go, I don't see any criminality.
>> And I just wanna say one other thing, because while I definitely have my
criticisms toward Senator Elizabeth Warren, and
I think those criticisms are warranted.
Prior to her pushing for the formation of the Consumer Financial Protection Bureau.
There was no government agency really looking out for
ordinary Americans who are getting ripped off by these banks, okay?
So after the economic collapse of 2008,
she just kept hounding the Obama administration.
Hounding, hounding until they finally agreed, they finally conceded to her and
formed the Consumer Financial Protection Bureau.
Listen, I wanna see far more protections for ordinary people, but
I'm happy that there's at least something.
There's at least a government agency that's investigating
the behavior of these banks, how they rip off ordinary people and
they're trying to get some money back to these people who are ripped off.
It's better than nothing, but it's just a start.
We need way more in order to ensure that these bank executives don't get away with
continuously engaging in this criminal behavior.
And then just getting a slap on the wrist,
just a fine that really doesn't hurt their bottom line at the end of the day.
>> Yeah, so I wrote about this in my book, Justice Is Coming.
And Barney Franken, honestly, Barack Obama shamelessly took credit for
the Consumer Financial Production Bureau when they were fighting it behind
the scenes the entire time.
And Elizabeth Warren, I thought,
was made terrible decisions in the 2016 and 2020 elections.
But Anne has 100% right credit where credit is due.
Without her, this bureau would not exist and we would not have at least recovered
$700 million in this case and many other cases for the American people.
So great credit to her.