The Consumer Financial Protection Bureau (CFPB) ordered Bank of America to pay $12 million for submitting incomplete mortgage lending data to the federal government.
Hundreds of the bank’s loan officers failed to ask mortgage applicants certain demographic questions as required by the Home Mortgage Disclosure Act (HMDA) and then reported that the applicants had chosen not to respond, the CFPB said in a Tuesday (Nov. 28) press release.
Reached for comment, a Bank of America spokesperson provided PYMNTS with an emailed statement saying that the bank properly collected demographic data in 99% of applications in the years reviewed by the CFPB and that the percentage of applicants not disclosing their race was lower than the industry average.
“After receiving one complaint in 2020, we conducted a review and notified the government, which prompted this inquiry,” the statement said. “As the CFPB notes, we took additional steps in 2020 and 2021 to enhance our monitoring and training to ensure employees ask applicants for required racial, ethnic and gender information. This data collection issue had no impact on applications.”
Under the CFPB’s order, the bank must pay $12 million into the CFPB’s victims relief fund, according to the CFPB press release.
“Bank of America violated a federal law that thousands of mortgage lenders have routinely followed for decades,” CFPB Director Rohit Chopra said in the release. “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 HMDA requires mortgage lenders to report demographic information about loan applications and originations to the CFPB and other federal regulators, which use that information to identify possible discriminatory lending practices, according to the release.
In its review of Bank of America’s HMDA reporting practices, the CFPB found that over a three-month period, the bank’s loan officers reported that 100% of mortgage applicants chose not to provide their demographic data. However, the loan officers had not asked for the information, the release said.
The CFPB also found that Bank of America learned that many loan officers were not collecting the required data as early as 2013 but, despite knowing about the problem, ignored it, per the release.
In addition to requiring that the bank pay a penalty, the CFPB’s order requires that the bank “take steps to avoid its illegal mortgage data reporting practices,” the release said.
In another action from July, the CFPB ordered Bank of America to pay more than $250 million in penalties and restitution to customers. That move came in response to the bank’s practices that included “systematically double-dipping” on fees imposed on customers with insufficient funds, the bureau said at the time.
The post CFPB Fines Bank of America Over Mortgage Lending Data Submissions first appeared on PYMNTS.com.
