Bank of America will pay $2.85 million to settle a class-action lawsuit alleging illegal fees and account restrictions.
Mishandling of Protected Funds
The lawsuit claimed that Bank of America violated New York’s Exempt Income Protection Act (EIPA). It alleged that the bank improperly grouped customer accounts together when calculating legally protected funds. This resulted in more money being frozen than allowed by law, impacting customers with court-ordered restraints on their accounts. The suit also stated that BofA sent exempt funds via regular mail, causing delays in accessing essential funds.
Changes in Bank Practices
Bank of America denies any wrongdoing but has agreed to the settlement. As part of the settlement, BofA will make several permanent changes to its practices:
- They will stop combining accounts when determining protected funds.
- They will inform account holders of their rights if their accounts are restrained.
- They will stop mailing checks for exempt funds, instead allowing customers to access funds via debit cards and online transfers.
Settlement Pending Approval
The settlement still needs court approval.
