By Chris Prentice

WASHINGTON (Reuters) – Financial institution of America (NYSE:) has agreed to pay a $10-million civil penalty for processing garnishments towards buyer financial institution accounts that violated state legal guidelines, the U.S. client watchdog mentioned on Wednesday.

The U.S. Client Monetary Safety Bureau on Wednesday mentioned it ordered Financial institution of America to pay a $10-million civil penalty for processing funds to collectors from clients’ accounts in 3,700 circumstances and leaving the purchasers paying not less than $592,000 in associated charges since August 2011.

The CFPB alleged the financial institution unlawfully froze buyer accounts, charged garnishment charges and despatched funds to collectors primarily based on out-of-state court docket orders that ought to have been processed below the legal guidelines of the states the place the purchasers lived.

A spokesperson for Financial institution of America, which didn’t admit or deny the CFPB’s findings, mentioned the agency has enhanced its processes to verify it’s complying with all state legal guidelines when executing court docket orders.