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Bank of America (BAC) Settles Excessive Fees Probe for $75M
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Bank of America Corp (BAC - Free Report) has agreed to pay a penalty of $75 million in order to settle a lawsuit with the federal court in Charlotte, NC, where the bank is based.
Per a Reuters article, the probes were related to the extraction of overdraft fees that the bank did not earn from customers’ savings and checking accounts.
In reviews, the company’s customers have accused Bank of America of charging $35 fees several times on a single transaction for insufficient funds or overdrafts. At times it also reflects the bank’s repeated attempts to process a payment at a merchant’s request.
Per the terms, the bank will stop imposing multiple fees on "retry" payments for at least five years. This will save an estimated amount of $5.3 million a month and $318 million on an overall basis of customers.
Banks continue to encounter legal probes and are charged with huge sums of money for business malpractices. Last December, Mr. Cooper Group Inc. (COOP - Free Report) agreed to pay a penalty of $28.6 million in order to settle legal probes with Consumer Financial Protection Bureau regarding certain improper loan servicing practices committed between 2010 and 2015.
Deutsche Bank (DB - Free Report) has agreed to pay a penalty of more than $130 million. The move will fully settle the probes related to criminal and civil charges against the bank for bribing foreign officials and manipulating the precious-metals futures market through a trading method called spoofing.
Also, JPMorgan (JPM - Free Report) has agreed to pay a fine of $250 million for poor risk management and internal controls over the fiduciary business. This was the second time over the last three months that the company faced penalty.
Our Take
Though involvement in legal probes and proceeding might keep related costs elevated, the opening of new branches, enhanced digital offerings, strategic buyouts and efforts to manage expenses will aid the bank’s profitability in the quarters.
Shares of Bank of America have appreciated 58.8% in the past six months compared with the industry's 51.9% growth.
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Bank of America (BAC) Settles Excessive Fees Probe for $75M
Bank of America Corp (BAC - Free Report) has agreed to pay a penalty of $75 million in order to settle a lawsuit with the federal court in Charlotte, NC, where the bank is based.
Per a Reuters article, the probes were related to the extraction of overdraft fees that the bank did not earn from customers’ savings and checking accounts.
In reviews, the company’s customers have accused Bank of America of charging $35 fees several times on a single transaction for insufficient funds or overdrafts. At times it also reflects the bank’s repeated attempts to process a payment at a merchant’s request.
Per the terms, the bank will stop imposing multiple fees on "retry" payments for at least five years. This will save an estimated amount of $5.3 million a month and $318 million on an overall basis of customers.
Banks continue to encounter legal probes and are charged with huge sums of money for business malpractices. Last December, Mr. Cooper Group Inc. (COOP - Free Report) agreed to pay a penalty of $28.6 million in order to settle legal probes with Consumer Financial Protection Bureau regarding certain improper loan servicing practices committed between 2010 and 2015.
Deutsche Bank (DB - Free Report) has agreed to pay a penalty of more than $130 million. The move will fully settle the probes related to criminal and civil charges against the bank for bribing foreign officials and manipulating the precious-metals futures market through a trading method called spoofing.
Also, JPMorgan (JPM - Free Report) has agreed to pay a fine of $250 million for poor risk management and internal controls over the fiduciary business. This was the second time over the last three months that the company faced penalty.
Our Take
Though involvement in legal probes and proceeding might keep related costs elevated, the opening of new branches, enhanced digital offerings, strategic buyouts and efforts to manage expenses will aid the bank’s profitability in the quarters.
Shares of Bank of America have appreciated 58.8% in the past six months compared with the industry's 51.9% growth.
Currently, the bank carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>