Bank of America has agreed to a $2.85 million class action settlement to resolve accusations that it unlawfully charged fees on bank accounts that were supposed to be protected under New York’s Exempt Income Protection Act (EIPA).
The case centers on claims that the bank violated EIPA rules between January 1, 2009, and February 17, 2023, by mishandling accounts containing exempt income—such as Social Security, pensions, or unemployment benefits—which under the law should not be seized or garnished by creditors.
Why Bank of America Was Sued
The lawsuit claims Bank of America:
- Grouped multiple customer accounts together to determine the total protected income, rather than looking at each account separately as required by law.
- Issued certified checks for exempt funds instead of depositing the money directly into customers’ accounts, which made the funds harder to access.
- Charged extra fees during this process, further reducing the amount customers could use from their protected income.
While the bank has not admitted wrongdoing, it agreed to the $2.85 million payout to resolve the legal action and avoid further litigation.
Who Is Eligible for a Payment?
Customers are eligible if:
- Their Bank of America accounts were frozen or had money taken during the eligible time frame (January 2009 – February 2023).
- They were charged restraint fees on income that should have been protected under the EIPA.
How Much Will Payments Be?
Eligible class members are expected to receive around $35, although the actual amount may vary depending on how many fees were charged and the number of people in the class.
No Claim Form Needed
You don’t need to file a claim to get the settlement money. If you’re eligible and don’t opt out, you will automatically receive a payment.
The deadline to exclude yourself or object to the settlement is May 19, 2025.
The final approval hearing is scheduled for June 18, 2025.
Changes to Bank of America Practices
As part of the settlement, Bank of America has already taken steps to improve its processes:
- Since August 2017, the bank has stopped combining accounts when calculating exempt amounts.
- Since February 2023, it has kept exempt funds directly in customers’ accounts, avoiding the certified check process.
Another Settlement: Up to $7,000 for Health Data Breach Victims
In a separate class action settlement, individuals affected by a healthcare data breach involving Navvis and SSM Health may be eligible to claim up to $7,000. The breach occurred July 12–15, 2023, and affected patients in Illinois, Missouri, Oklahoma, and Wisconsin.
The claim deadline for this health data breach settlement is May 26, 2025, and unlike the Bank of America case, a claim form is required to receive a payout.
If you were a Bank of America customer in New York between 2009 and 2023, and your account had protected income seized or frozen, you may be entitled to a payment from the $2.85 million class action settlement. There’s nothing you need to do unless you wish to opt out by the May 19, 2025 deadline. This case highlights the importance of protecting exempt income and holding financial institutions accountable when they violate consumer protection laws.