BANK OF AMERICA TO PAY $2.85 MILLION SETTLEMENT IN CLASS ACTION LAWSUIT

Bank of America (BofA), the second-largest bank in the United States, has agreed to a $2.85 million settlement to resolve a class action lawsuit brought by current and former customers. The lawsuit alleged violations of New York’s Exempt Income Protection Act (EIPA), accusing the bank of mishandling accounts and charging improper fees to customers subject to court-ordered restraints.

The complaint centered on BofA’s practice of aggregating multiple accounts before calculating the amount of funds legally protected under the EIPA. This allegedly resulted in more funds being frozen than permitted by law. Additionally, the bank was accused of issuing checks for exempt amounts via regular mail, delaying customers’ access to essential funds for daily expenses.

While BofA has agreed to the settlement, the bank has not admitted to any wrongdoing. As part of the agreement, BofA has committed to permanently revising its practices, including:

• Ceasing the aggregation of accounts when determining legally protected funds.
• Providing account holders with timely notifications of their rights in cases of account restraints.
• Discontinuing the issuance of checks for exempt funds, ensuring customers can access their money promptly through debit cards, online transfers, and other methods.

The settlement is pending court approval. If approved, the multi-million-dollar payout will compensate affected customers while enforcing stricter compliance with EIPA regulations.

This resolution underscores the ongoing scrutiny of financial institutions’ handling of customer accounts and their adherence to state and federal laws.