Fines and Penalties Mount, But Nothing Changes: BofA
On a couple of previous occasions, I’ve tallied the fines and penalties incurred by Bank of America. As of January 2013, when I last added up the numbers, BoA had incurred roughly $34 billion in payments. The bank is on the cusp of a milestone. By my reckoning, they’ve now paid out $48 billion, so they’ll soon pass the $50 billion barrier. Since there are still any number of large matters still pending, such as the LIBOR scandal, BofA should have no problem adding billions more to their settlement total.
Many of the settlements and penalties relate to Merrill Lynch and Countrywide, which BofA acquired. However, the bank itself has had its share of missteps. The latest is a $772 million settlement with the Consumer Financial Protection Bureau. Apparently the bank was charging customers for credit reporting and monitoring services that weren’t received. Moreover, the bank’s telemarketers used a variety of misleading practices to enroll customers in these services. In the past year, the bank has incurred much smaller fines for improperly using robo-calls as part of debt collection practices and steering clients into higher fee mutual funds.
Of course, BofA isn’t alone in regularly settling cases and paying fines. Every large bank seems to be caught up in the same types of improprieties. Paying fines and agreeing to settlements has merely become the cost of doing business. The culture that brought us the credit bubble wasn’t just confined to the mortgage business and sadly, it hasn’t changed at all. The culture has become very concentrated and even more dangerous, as half a dozen huge banks now rule our financial system. In due course, we’ll have another financial crisis, and then we may get around to fixing the problem. Meanwhile, the banks will continue to engage in practices that rack up fees and penalties.
 See, “Bank of America: It Failed Long Ago” (January 19, 2013)