Exhibit 163 — In re Bank of America California Unemployment Benefits Litigation (Dkt. 378-8, S.D. Cal. No. 3:21-md-02992)

Record facts

U.S. District Court for the Southern District of California · No. 3:21-md-02992-GPC-MSB · Doc. 378-8 · 2024-11-21 · Docket on CourtListener

Full text

Exhibit 163 
Case 3:21-md-02992-GPC-MSB     Document 378-8     Filed 11/21/24     PageID.14381 
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#2022-024 
UNITED STATES OF AMERICA 
DEPARTMENT OF THE TREASURY 
OFFICE OF THE COMPTROLLER OF THE CURRENCY 
 
 
In the Matter of: 
 
Bank of America, N.A. 
Charlotte, North Carolina 
) 
) 
) 
) 
) 
 
 
AA-ENF-2022-22 
 
 
CONSENT ORDER 
 
WHEREAS, the Office of the Comptroller of the Currency (“OCC”) has supervisory 
authority over Bank of America, N.A., Charlotte, North Carolina (“Bank”); 
WHEREAS, the OCC intends to initiate civil money penalty proceedings against the 
Bank pursuant to 12 U.S.C. § 1818(i), through the issuance of a Notice of Assessment of a Civil 
Money Penalty, related to: (1) the administration of the Bank’s prepaid cards for unemployment 
benefits, specifically engagement in (i) unsafe or unsound practice(s), including deficiencies in 
its risk management, operational processes and controls, internal audit, and investigation and 
resolution of consumer claims of unauthorized transactions; and (ii) unfair and deceptive 
practices in violation(s) of Section 5 of the Federal Trade Commission Act (“FTC Act”), 15 
U.S.C. § 45(a)(1); and (2) engaging in unsafe or unsound practices related to deficiencies in its 
enterprise-wide complaints risk management framework; 
WHEREAS, in the interest of cooperation and to avoid additional costs associated with 
administrative and judicial proceedings with respect to the above matter, the Bank, by and 
through its duly elected and acting Board of Directors (“Board”), consents to the issuance of this 
Consent Order (“Order”), by the OCC through the duly authorized representative of the 
Comptroller of the Currency (“Comptroller”); and 
NOW, THEREFORE, pursuant to the authority vested in the OCC by Section 8(i) of the 
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Federal Deposit Insurance Act, as amended, 12 U.S.C. § 1818(i), the OCC hereby orders that: 
ARTICLE I 
JURISDICTION 
(1) 
 The Bank is an “insured depository institution” as that term is defined in  
12 U.S.C. § 1813(c)(2). 
(2) 
The Bank is a national banking association within the meaning of 12 U.S.C. 
§ 1813(q)(1)(A), and is chartered and examined by the OCC. See 12 U.S.C. § 1 et seq. 
(3) 
The OCC is the “appropriate Federal banking agency” as that term is defined in 
12 U.S.C. § 1813(q) and is therefore authorized to initiate and maintain this civil money penalty 
action against the Bank pursuant to 12 U.S.C. § 1818(i). 
ARTICLE II 
COMPTROLLER’S FINDINGS 
 
The Comptroller finds, and the Bank neither admits nor denies, the following: 
 
(1) 
For several years, the Bank issued and administered prepaid debit cards to 
distribute unemployment insurance benefits (“UI Prepaid Cards”) to consumers that were loaded 
with benefit funds issued by certain states, hereinafter referred to as the Unemployment Benefits 
Prepaid Card Program (“Program”).  
(2) 
In March 2020, millions became unemployed and Congress enacted the 
Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which created the new 
Pandemic Unemployment Assistance (“PUA”) benefit.  The CARES Act and PUA expanded 
unemployment benefits eligibility and provided greater benefit amounts than previously 
available. As a result, the size of the Program increased substantially (from under one million 
unique cards loaded in January 2020 to over six million in July 2020), as did the volume of 
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benefits issued by the states and loaded onto UI Prepaid Cards (from approximately $1 billion in 
January 2020 to over $27 billion in July 2020). Along with the increases in Program participants 
and benefits, the Program experienced an increase in fraud, including with respect to 
unauthorized transaction claims. 
(3) 
The Bank failed to establish effective risk management over the Program, and, 
beginning in 2020, denied or delayed many consumers’ access to unemployment benefits when 
consumers filed or attempted to file UI Prepaid Card unauthorized transaction claims.  
Specifically, the Bank: 
(a) 
applied an automated fraud filter between September 28, 2020 and June 8, 
2021 to decision UI Prepaid Card error claims that met certain criteria 
(“Fraud Filter”) without conducting a sufficient investigation to: (i) deny 
many consumers’ claims of unauthorized transactions on their UI Prepaid 
Cards, and (ii) “freeze” or “block” the UI Prepaid Card accounts 
associated with the claims. Consumers with frozen or blocked accounts 
could not access the unemployment benefits in their UI Prepaid Card 
accounts until the Bank removed the freeze or block.  
(b) 
failed to provide timely and full provisional or final credit to many 
consumers entitled to such credits who reported unauthorized transactions 
on their UI Prepaid Card accounts. 
(c) 
retroactively applied the Fraud Filter to many consumers’ claims of 
unauthorized transactions on their UI Prepaid Card accounts without 
conducting further investigation and providing advance notice, which 
incorrectly resulted in the reversal of provisional and final credits that the 
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Bank previously provided to those consumers. 
(d) 
impeded many consumers’ ability to regain access to their unemployment 
benefits through the UI Prepaid Cards and to request reconsideration of 
their unauthorized transaction claims as a result of operational 
deficiencies. 
(e) 
provided consumers deceptive disclosures and notices with respect to 
liability for unauthorized transactions, processing of unauthorized 
transaction claims, and account freezes and blocks. 
(4) 
Overall, the Bank has the following deficiencies in its administration of the 
Program: 
(a) 
inadequate risk management practices in both the front-line units and 
independent risk management, including ineffective oversight, risk 
assessment, monitoring, and reporting; 
(b) 
inadequate internal controls, including those relating to contract 
management; 
(c) 
inadequate oversight, risk management, and monitoring of UI Prepaid 
Card unemployment benefits vendors (“Program Vendors”); and 
(d) 
inadequate oversight and coverage by the Bank’s independent audit 
function. 
(5) 
In addition, the Bank failed to establish an effective enterprise-wide complaints 
risk management framework that is commensurate with the Bank’s size, complexity, and risk 
profile. Specifically, the complaint risk management framework lacks an effective: 
(a) 
process to identify, measure, manage, and report complaints;  
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(b) 
complaint resolution process; and  
(c) 
quality assurance process. 
(6) 
By reason of the deficiencies and conduct described in Paragraphs (2) through (5) 
of this Article, the Bank engaged in unsafe or unsound practices and engaged in unfair and 
deceptive practices in Section 5 of the FTC Act, 15 U.S.C. §45(a). These violations and practices 
support actions against the Bank under 12 U.S.C. § 1818(b) and (i)(2)(B).  
(7) 
The Bank has begun taking corrective actions and has committed to taking 
necessary and appropriate steps to remedy the deficiencies identified by the OCC and to assist 
and remediate harmed consumers. 
ARTICLE III 
ORDER FOR A CIVIL MONEY PENALTY 
(1)   
The Bank shall make payment of a civil money penalty in the total amount of one 
hundred twenty-five million ($125,000,000) which shall be paid upon the execution of this 
Order. 
(2) 
Such payment shall be made by a wire transfer sent in accordance with 
instructions provided by the OCC and the docket number of this case (AA-ENF-2022-22) shall 
be entered on the wire confirmation. A photocopy of the wire confirmation shall be sent 
immediately, by overnight delivery, to the Director of Enforcement and Compliance, Office of 
the Comptroller of the Currency, 400 7th Street, S.W., Washington, D.C. 20219. 
ARTICLE IV 
WAIVERS 
(1) 
The Bank, by executing and consenting to this Order, waives: 
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(a) 
any and all rights to the issuance of a Notice of Charges pursuant to 
12 U.S.C. § 1818; 
(b) 
any and all procedural rights available in connection with the issuance of 
this Order; 
(c) 
any and all rights to a hearing and a final agency decision pursuant to 
12 U.S.C. § 1818 and 12 C.F.R. Part 19; 
(d) 
any and all rights to seek any type of administrative or judicial review of 
this Order; 
(e) 
any and all claims for fees, costs, or expenses against the OCC, or any of 
its officers, employees, or agents related in any way to this enforcement 
matter or this Order, whether arising under common law or under the 
terms of any statute, including, but not limited to, the Equal Access to 
Justice Act, 5 U.S.C. § 504 and 28 U.S.C. § 2412;  
(f) 
any and all rights to assert these proceedings, the consent to and/or the 
issuance of this Order, as the basis for a claim of double jeopardy in any 
pending or future proceedings brought by the United States Department of 
Justice or any other governmental entity; and 
(g) 
any and all rights to challenge or contest the validity of this Order. 
ARTICLE V 
CLOSING 
(1) 
This Order is a settlement of the civil money penalty proceedings against the 
Bank contemplated by the OCC, based on the unsafe or unsound practices and violations of law 
described in the Comptroller’s Findings set forth in Article II of this Order. The OCC releases 
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and discharges the Bank from all potential liability for a civil money penalty order that has been 
or might have been asserted by the OCC based on the practices and/or violations described in 
Article II of this Order, to the extent known to the OCC as of the effective date of this Order. 
Nothing in this Order, however, shall prevent the OCC from: 
(a) 
instituting enforcement actions other than a civil money penalty order 
against the Bank based on the Comptroller’s Findings set forth in Article 
II of this Order; 
(b) 
instituting enforcement actions against the Bank based on any other 
findings; 
(c) 
instituting enforcement actions against institution-affiliated parties (as 
defined by 12 U.S.C. § 1813(u)) based on the Comptroller’s Findings set 
forth in Article II of this Order, or any other findings; or 
(d) 
utilizing the Comptroller’s Findings set forth in Article II of this Order in 
future enforcement actions against the Bank or its institution-affiliated 
parties to establish a pattern or the continuation of a pattern. 
(2) 
Nothing in this Order is a release, discharge, compromise, settlement, dismissal, 
or resolution of any actions, or in any way affects any actions that may be or have been brought 
by any other representative of the United States or an agency thereof, including, without 
limitation, the United States Department of Justice. 
(3) 
This Order is:  
(a) 
an “order issued with the consent of the depository institution” within the 
meaning of 12 U.S.C. § 1818(h)(2); 
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(b) 
an “effective and outstanding . . . order” within the meaning of 12 U.S.C. 
§ 1818(i)(1); and 
(c) 
a “final order” within the meaning of 12 U.S.C. § 1818(i)(2) and (u). 
(4) 
This Order is effective upon its issuance by the OCC, through the Comptroller’s 
duly authorized representative.  
(5) 
This Order is not a contract binding on the United States, the United States 
Treasury Department, the OCC, or any officer, employee, or agent of the OCC and neither the 
Bank nor the OCC intends this Order to be a contract. 
(6) 
No separate promise or inducement of any kind has been made by the OCC, or 
by its officers, employees, or agents, to cause or induce the Bank to consent to the issuance of 
this Order. 
(7) 
The terms of this Order, including this paragraph, are not subject to amendment 
or modification by any extraneous expression, prior agreements, or prior arrangements between 
the parties, whether oral or written. 
 
IN TESTIMONY WHEREOF, the undersigned, authorized by the Comptroller as his duly 
authorized representative, has hereunto set her signature on behalf of the Comptroller.  
  //s// Digitally Signed, Dated: 2022.07.14 
 
 
 
 
 
Tanya K. Smith 
Deputy Comptroller 
Large Bank Supervision 
 
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IN TESTIMONY WHEREOF, the undersigned, as the duly elected and acting Board of 
Directors of the Bank of America, N.A., Charlotte, North Carolina have hereunto set their 
signatures on behalf of the Bank. 
  /s/ 
 
 
 
 
 
 
 
 
07/12/22 
Brian T. Moynihan  
/s/ 
 
Date 
13 Jul, 2022 
Sharon L. Allen  
/s/ 
 
Date 
13 Jul, 2022 
Frank P. Bramble, Sr.  
/s/ 
 
Date 
13 Jul, 2022 
Pierre J.P. de Weck  
/s/ 
 
Date 
07/13/2022 
Arnold W. Donald  
/s/ 
 
Date 
13 Jul, 2022 
Linda P. Hudson  
/s/ 
 
Date 
12 Jul, 2022 
Monica C. Lozano  
/s/ 
 
Date 
12 Jul, 2022 
Lionel L. Nowell, III  
/s/ 
 
Date 
12 Jul, 2022 
Denise L. Ramos  
/s/ 
 
Date 
13 Jul, 2022 
Clayton S. Rose 
 
Date 
 
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/s/ 
 
12 Jul, 2022 
Michael D. White  
/s/ 
 
Date 
13 Jul, 2022 
Thomas D. Woods  
/s/ 
 
Date 
12 Jul, 2022 
R. David Yost  
/s/ 
 
Date 
07/13/2022 
Maria T. Zuber 
 
Date 
 
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