Bank of America set aside roughly $425 million “recognized for certain regulatory matters” as part of its noninterest expenses, the bank reported Monday.
That total encompasses $225 million in penalties regulators announced last week over a prepaid card program the bank used to distribute unemployment insurance and benefits payments during the COVID-19 pandemic.
"The balance of the expense relates to an industrywide issue, and it concerns the use of unapproved personal devices," CFO Alastair Borthwick told reporters, according to Reuters. "We hope to finalize that in the coming weeks.”
That $200 million total mirrors the amount Morgan Stanley said last week it would set aside based on discussions the bank had with the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
JPMorgan Chase agreed in December to pay those two regulators $200 million to settle investigations over failures to maintain and preserve written communications, between January 2018 and November 2020, involving employees using unofficial channels such as WhatsApp or personal devices to send texts and emails about company business.
Bloomberg last week identified two other top-six U.S. banks expected to see similarly sized losses in the communications probe. Citi has set aside an “appropriate” total “aligned with what our peers have disclosed,” CFO Mark Mason told reporters Friday.
Goldman Sachs has also had advanced discussions with the SEC and CFTC to pay a similar amount, Bloomberg reported, citing a source familiar with the matter. A Goldman spokesperson, however, declined comment to the wire service last week.
The bank did not mention a set-aside for that purpose in its earnings report Monday — only that net provisions for litigation and regulatory proceedings in the second quarter totaled $91 million.
