The Consumer Financial Protection Bureau (CFPB) has imposed a $12 million penalty on Bank of America for failing to accurately report demographic data in relation to its mortgage lending business.
The bank was found to be violating the Home Mortgage Disclosure Act (HMDA). The CFPB found that for more than four years between 2016 and 2021, hundreds of Bank of America loan officers failed to ask mortgage applicants certain demographic questions as required by law and falsely reported that the applicants chose not to respond.
CFPB director Rohit Chopra stated: “Bank of America violated a federal law that thousands of mortgage lenders have routinely followed for decades. It is illegal to report false information to federal regulators, and we will be taking additional steps to ensure that Bank of America stops breaking the law.”
The bank, with $2.4 trillion in assets as of June 2023, is required to pay the $12 million penalty into the CFPB’s victims relief fund.
The HMDA, enacted in 1975, mandates mortgage lenders to report information about loan applications and originations to monitor whether financial institutions are serving the housing needs of their communities and to identify possible discriminatory lending patterns.
The CFPB’s review revealed that Bank of America falsely reported that applicants declined to provide demographic information and failed to oversee accurate data collection.
Bank of America did not admit or deny any wrongdoing but accepted the fine. In a statement reported by Reuters, the company said demographic data was collected correctly in 99% of cases. It had notified the federal government of errors after receiving a complaint three years ago, and said it had since improved training for staff responsible for collecting the information.
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