Bank of America customers who had their accounts frozen or garnished over the past decade may be entitled to compensation from a significant $2.85 million class action settlement. With critical deadlines approaching this Monday, May 19, 2025, affected customers need to understand their rights and options before it’s too late.
Understanding the $2.85 Million EIPA Settlement
Bank of America has agreed to resolve a class action lawsuit alleging violations of New York’s Exempt Income Protection Act (EIPA). This settlement represents one of the most substantial consumer protection victories in recent banking history, addressing improper fee practices that affected thousands of account holders over a 14-year period.
The lawsuit originated from allegations that Bank of America systematically violated state consumer protection laws designed to safeguard certain types of income from creditor seizure. The EIPA specifically protects essential income sources like Social Security benefits, unemployment compensation, and pension payments from being frozen or garnished by debt collectors.
What Bank of America Allegedly Did Wrong
According to court documents, Bank of America engaged in several problematic practices that violated the EIPA. Instead of calculating exempt amounts on individual accounts as required by law, the bank allegedly aggregated multiple accounts belonging to the same judgment debtor and used the combined total to determine exemptions. This practice effectively reduced the protection available to individual account holders.
Additionally, the lawsuit claims Bank of America delayed customers’ access to their exempt funds by mailing certified checks instead of making the money immediately available in their accounts. The bank then allegedly charged fees for these transactions, further violating the protective intent of the EIPA.
These practices affected customers whose accounts were restrained or levied upon between January 1, 2009, and February 17, 2023, as part of debt collection efforts in New York courts.
Who Qualifies for the Settlement
The settlement class includes all individual Bank of America account holders who experienced account restraints or levies during the specified time period. Specifically, you may be eligible if you held a Bank of America account that was:
- Restrained and/or levied upon between January 1, 2009, and February 17, 2023
- Subject to New York Civil Practice Law and Rules provisions
- Affected by EIPA violations
- Not applied by a sheriff or receiver to satisfy a judgment
The good news for eligible customers is that no claim form is required to receive benefits. The settlement administrator will automatically identify qualified class members using information provided by Bank of America, making the process seamless for those entitled to compensation.
Settlement Timeline and Key Deadlines
Understanding the critical dates is essential for making informed decisions about your participation in this settlement.
| Date | Event | Significance |
|---|---|---|
| May 19, 2025 | Exclusion and Objection Deadline | Last day to opt out or object to settlement terms |
| June 18, 2025 | Final Approval Hearing | Court decides whether to approve the settlement |
| 45 days after approval | Payment Distribution | Checks mailed to eligible class members |
What Happens on Monday, May 19th
Monday represents the final opportunity for class members to exclude themselves from the settlement or object to its terms. If you take no action by this deadline, you will automatically remain in the settlement class and receive the estimated $35 payment once the court grants final approval.
Settlement Benefits and Payment Details
Each eligible class member is expected to receive approximately $35 from the settlement fund. While this amount may seem modest, it represents automatic compensation without the need for extensive documentation or proof of damages.
The settlement also includes significant business practice reforms. Bank of America has agreed to implement improved procedures, including:
- No longer aggregating judgment debtors’ accounts before calculating exempt amounts (implemented since August 2017)
- Keeping exempt funds in judgment debtors’ accounts rather than mailing checks (implemented since February 2023)
These changes ensure that future customers will benefit from enhanced protection of their exempt income.
Your Options: Stay In, Opt Out, or Object
Staying in the Settlement (Recommended for Most)
If you take no action, you’ll automatically receive settlement benefits while giving up your right to sue Bank of America individually for these specific claims. For most class members, this represents the most practical option given the automatic nature of the payment.
Opting Out of the Settlement
You can exclude yourself from the settlement by mailing a written request postmarked no later than May 19, 2025. Opting out preserves your right to sue Bank of America independently but forfeits any settlement payment. This option might make sense if you believe you suffered significantly more than $35 in damages.
Objecting to the Settlement
You can remain in the settlement while objecting to its terms. This allows you to receive payment while expressing disagreement with aspects of the agreement. If the court agrees with objections, it may modify the settlement terms.
Business Practice Reforms and Long-term Impact
Beyond monetary compensation, this settlement establishes important precedents for banking industry practices. The reforms implemented by Bank of America serve as a model for how financial institutions should handle exempt income protection.
The settlement addresses systemic issues that affected vulnerable populations relying on protected income sources. By requiring individualized account analysis and immediate fund availability, the agreement strengthens consumer protections for some of society’s most financially vulnerable members.
How to Get More Information
For detailed information about the settlement, including all legal documents and court filings, visit the official settlement website at EIPARestraintSettlement.com. You can also contact the settlement administrator at:
Jackson v. Bank of America, N.A. c/o Kroll Settlement Administration LLC PO Box 225391 New York, NY 10150-5391 Phone: 833-876-9292
The Bigger Picture of Banking Settlements
This Bank of America settlement represents part of a broader pattern of financial institutions resolving consumer protection violations. Recent years have seen numerous banking settlements addressing various practices, from overdraft fees to wire transfer charges.
These settlements highlight the importance of consumer protection laws and the role of class action litigation in holding large corporations accountable for practices that affect thousands of customers.
The Bank of America EIPA settlement offers affected customers both immediate compensation and long-term protection improvements. With the Monday deadline fast approaching, eligible customers should carefully consider their options and take appropriate action before time runs out.
While the individual payment amount may seem modest, the collective impact represents a significant victory for consumer protection and sets important precedents for how banks must handle exempt income. Whether you choose to remain in the settlement, opt out, or object, understanding your rights ensures you can make the best decision for your individual circumstances.
Frequently Asked Questions
Q: Do I need to file a claim to receive money? A: No, eligible class members will automatically receive payments without filing a claim form.
Q: How much will I receive? A: Each eligible class member is expected to receive approximately $35.
Q: What if I don’t remember having my account restrained? A: Bank of America has provided necessary information to identify all eligible class members automatically.
Q: When will I receive my payment? A: Checks will be mailed approximately 45 days after the court grants final approval on June 18, 2025.
Q: Can I still opt out after May 19th? A: No, the May 19, 2025 deadline is firm and cannot be extended.
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