The U.S. Consumer Financial Protection Bureau has ordered Bank of America to pay more than $100 million to customers after finding the bank double-dipped on some fees, withheld credit card rewards, and opened fake accounts. American Banker reporter Polo Rocha tells Yahoo Finance Live what impact the findings will have on the bank.

Video Transcript

BRAD SMITH: Polo, I want to get your perspective on a recent development this morning. The Consumer Financial Protection Bureau took action against Bank of America, accusing the lender of illegally charging junk fees and opening fake accounts. And Bank of America is going to be paying $100 million-- more than $100 million to harmed consumers, and it looks like $150 million in penalties to the CFPB and the Office of the Comptroller of the Currency as well.

Of course, this is not the enforcement-- first enforcement action that Bank of America has faced for illegal activity in its consumer business. I want to get your perspective on the significance of this, especially in the era that we find ourselves moving through some of the bank turmoil. And as the largest banks have tried to continue to and have gone out to consumers to reassure them that the system is no doubt insured and safe, but they've got their best interests in mind.

POLO ROCHA: Yeah. I think, you know, 150 million in penalties, it's a big number, but it's, you know-- it's not so massive that it will drastically weigh on their earnings. But I think it kind of lines up with this focus from the CFPB and Biden regulators on overdraft fees and, you know, maybe cracking down on fees that maybe are double charged. This case kind of also gets at withholding credit card bonuses that were promised to consumers.

Bank of America says it's changed its overdraft and policies over the years and that its revenues have really dropped 90% since it kind of made some big reductions in the overdraft fee and eliminated other fees. That said, you know, there's also this kind of sales practices, you know, from years ago. Wells Fargo, obviously, had some major troubles and is still dealing with them due to sales practices and opening up accounts without consumers' consent.

So you know, regulators have kind of looked at sales practices at big banks in the years since. And so that's just another example of an issue popping up here, but it certainly lines up with bigger penalties that bigger and regional banks are facing from regulators in cases of harming consumers.

- You know, it's interesting what you mentioned off the top too in that, of course, if we compare this to the typical amount of revenue that Bank of America or other banks bring in, how this fine stacks up against what they typically make and then over kind of an extended period of time because some of these fines are paid off over years, not just a lump sum payment.

So all of that considered, you know, what is to keep banks from continuing an activity like this knowing that it's kind of a slap on the wrist knowing the type of agreement that they can enter into to kind of stagger out that payment and in the near-term still have some type of practices that are going to net them more cash, more returns as well?

- Yeah. You know, I think gradually plan for-- you know, they know when they're being investigated and kind of set aside money over time for it. So to a certain extent, I would assume that, you know, banks are kind of well prepared for this, but there is a reputational damage, right? You know, if you have, you know, several or a string of these issues, you know, maybe customers don't want to come to you as much.

And in this era of kind of the importance of keeping deposits and keeping, you know, money in your bank so that you can lend it out, you know, losing customer's trust whether it be consumers, or small business, or corporate clients, keeping that trust is really important. So you know, I think there's always kind of a limiting factor there.

- Really solid insights. Polo Rocha who is the American banker reporter joining us here this morning. Thanks so much for the time, Polo. Appreciate it.

- Thank you.