Bank of America (NYSE: BAC) announced that it has reached a settlement with regard to the charges levied against it. The bank was held guilty of charging excessive overdraft fees.
* Bank of America agreed to pay $410 million in settlement.
* Bank of America is the largest US bank by assets.
Two dozen other US, Canadian and European banks were named as defendants in the case. Other prominent banks include JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. Bank of America also stated that it has already changed its overdraft related practices. The bank has removed fees related to debit transactions. It has considerably reduced its fee for overdrawn clients.
Many banks typically charge between $25 and $35 fee to its overdrawn clients. The case claims that such fees overburden lower income clients. The case also claimed that Bank of America did not inform its clients that they could refuse to avail overdraft protection. Federal Reserve had imposed a new rule on the banks last year which prohibited them from charging fee on debit card and electronic transactions without advance customer approval. However, Bank of America charged its customers overdraft fee instead of declining their transactions.
Center for Responsible Lending found that in 2008, overdraft fee amount to $23.7 billion. Just four years back, the fee had totaled $10.3 billion. Bank of America is a financial holding company and provides various services such as home equity lines of credit, debt underwriting , mortgage loans and retail banking. The company serves individuals, corporations, small businesses and governments. Bank of America is operational globally.
Bank of America stock is currently trading at $14.60. The stock is up 2.20 percent from its previous close. Bank of America stock opened at $14.51 and touched the high of $14.55. The stock’s lowest price in today’s session is $14.43. The company stock’s beta is 2.21. The company stock has traded in the range of $10.91 and $19.86 during the past 52 weeks. The company’s market cap is $146.08 billion.
Bank of America reported its total cash reserves at $892.121 billion for the year ending Dec 31, 2009. Its total assets were worth $2223.299 billion for the same time period. Bank of America had valued its total liabilities at $1991.855 billion. The company had reported its revenue at $150.450 billion and its net income for the year stood at $6.276 billion.