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BofA (BAC) Might Face Suit for Failing to Refund Overdraft Fees
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Per a Reuters report, Bank of America Corporation (BAC - Free Report) is likely to face a lawsuit for failing to honor a promise to refund overdraft fees to customers facing financial trouble during the COVID-19 pandemic.
On Wednesday, U.S. District Judge Yvonne Gonzalez Rogers ruled that customers probably suspected that even after quietly ending its Client Assistance Program on Aug 31, 2020, BofA misinformed customers on its website and mobile application as it continued to promise relief from overdraft and insufficient fund fees.
BAC had started the program five months earlier to address the pandemic’s impact on its customers.
Per the claims, the bank deceived its customers by making them believe that it was better to incur $35 overdraft fees than borrow from family members or obtain loans, because the fees would be refunded under the program.
However, Rogers said that the plaintiffs “sufficiently pleaded that defendant advertised a program when none existed.”
Andrea Gold, a lawyer for the plaintiffs, stated, “The bank promised COVID pandemic relief, and instead ended relief when the pandemic was still raging. Consumers deserve to get what they are promised.”
Rogers claimed that it was “plausibly deceptive” for BAC to not formally disclose it had ended the program, even as it promised to offer refunds on a case-by-case basis.
Seeking dismissal, Bank of America said that reasonable customers would not have viewed a formal announcement as material, and that it never promised refunds for months or years as pandemic conditions eased.
Over the past six months, BofA shares have gained 41.6% compared with the industry’s 38.9% growth.
A fine of $348.2 million has been imposed by the Federal Reserve and the Office of the Comptroller of the Currency (“OCC”) on JPMorgan (JPM - Free Report) for failing to properly monitor the trading activities of its clients and employees.
Per the regulators, the misconduct occurred between 2014 and 2023.
The regulators said that JPM “engaged in unsafe or unsound practices” and “failed to establish adequate governance over trading venues on which it is active.”
The OCC stated that JPMorgan “failed to surveil billions of instances of trading activity on at least 30 global trading venues.”
Stifel Financial Corp.’s (SF - Free Report) subsidiaries, Stifel Nicolaus & Co. and Stifel Independent Advisors, agreed to pay $2.3 million in fines and restitution over alleged violations of the Financial Industry Regulatory Authority’s (“FINRA”) rules relating to non-traditional exchange-traded products.
In its order, FINRA said that the firms did not establish, maintain and enforce supervisory systems, including written supervisory procedures, reasonably designed to achieve compliance with their suitability obligations.
The fine comes 10 years after SF faced similar allegations. In January 2014, the firms were ordered to pay $1 million to settle similar violations.
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BofA (BAC) Might Face Suit for Failing to Refund Overdraft Fees
Per a Reuters report, Bank of America Corporation (BAC - Free Report) is likely to face a lawsuit for failing to honor a promise to refund overdraft fees to customers facing financial trouble during the COVID-19 pandemic.
On Wednesday, U.S. District Judge Yvonne Gonzalez Rogers ruled that customers probably suspected that even after quietly ending its Client Assistance Program on Aug 31, 2020, BofA misinformed customers on its website and mobile application as it continued to promise relief from overdraft and insufficient fund fees.
BAC had started the program five months earlier to address the pandemic’s impact on its customers.
Per the claims, the bank deceived its customers by making them believe that it was better to incur $35 overdraft fees than borrow from family members or obtain loans, because the fees would be refunded under the program.
However, Rogers said that the plaintiffs “sufficiently pleaded that defendant advertised a program when none existed.”
Andrea Gold, a lawyer for the plaintiffs, stated, “The bank promised COVID pandemic relief, and instead ended relief when the pandemic was still raging. Consumers deserve to get what they are promised.”
Rogers claimed that it was “plausibly deceptive” for BAC to not formally disclose it had ended the program, even as it promised to offer refunds on a case-by-case basis.
Seeking dismissal, Bank of America said that reasonable customers would not have viewed a formal announcement as material, and that it never promised refunds for months or years as pandemic conditions eased.
Over the past six months, BofA shares have gained 41.6% compared with the industry’s 38.9% growth.
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Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Legal Issues Faced by Other Finance Firms
A fine of $348.2 million has been imposed by the Federal Reserve and the Office of the Comptroller of the Currency (“OCC”) on JPMorgan (JPM - Free Report) for failing to properly monitor the trading activities of its clients and employees.
Per the regulators, the misconduct occurred between 2014 and 2023.
The regulators said that JPM “engaged in unsafe or unsound practices” and “failed to establish adequate governance over trading venues on which it is active.”
The OCC stated that JPMorgan “failed to surveil billions of instances of trading activity on at least 30 global trading venues.”
Stifel Financial Corp.’s (SF - Free Report) subsidiaries, Stifel Nicolaus & Co. and Stifel Independent Advisors, agreed to pay $2.3 million in fines and restitution over alleged violations of the Financial Industry Regulatory Authority’s (“FINRA”) rules relating to non-traditional exchange-traded products.
In its order, FINRA said that the firms did not establish, maintain and enforce supervisory systems, including written supervisory procedures, reasonably designed to achieve compliance with their suitability obligations.
The fine comes 10 years after SF faced similar allegations. In January 2014, the firms were ordered to pay $1 million to settle similar violations.