Bank of America froze the bank accounts of some of New York’s most financially vulnerable people, charged them fees on money they couldn’t touch, and then took 13 years to settle the lawsuit — all without ever admitting it did anything wrong.

How They Locked People Out of Their Own Money

When a creditor wins a court judgment against someone, New York State law gives that person a financial lifeline: certain amounts of money in their bank accounts are legally exempt from seizure. These protections exist because lawmakers recognized that stripping someone of every dollar they have doesn’t help anyone — it just makes poverty permanent. The law draws a line. Bank of America crossed it.

According to the class action settlement agreement, Bank of America’s practice — prior to August 2017 — involved aggregating all of a judgment debtor’s accounts together before calculating the legally protected exempt amount. That sounds like an accounting technicality, but the real-world impact was brutal: people lost access to money the law specifically said they were allowed to keep. The bank was treating multiple protected accounts as one pool, calculating one exemption, and freezing everything above that inflated threshold.

After a restraining notice or levy arrived, Bank of America also had a practice of automatically issuing checks for the “exempt” amount — rather than letting people continue to use their own accounts normally. That practice continued until February 2023, more than 12 years after the lawsuit was filed. In the meantime, the bank was also charging non-sufficient fund (NSF) fees on restrained accounts — fees for bounced transactions on money that was frozen because the bank froze it.

The Timeline: A Decade of Delay

The original lawsuit was filed in 2011. The court certified it as a class action in January 2020 — nine years later. The settlement agreement itself was filed with the Kings County Clerk on October 22, 2024. That is thirteen years from the moment the first person stood up and said “this is wrong” to the moment a settlement was signed. Bank of America’s legal team had thirteen years of resources, billing hours, and institutional power behind them. The class members had their names on a court document.

The Non-Financial Ledger: What Money Can’t Measure

A settlement figure like $2.85 million (enough to pay three months of groceries for roughly 5,700 average American families) sounds like justice. It is a number that fits neatly into a press release and lets a bank move on. What it does not capture is the daily reality of waking up and not being able to pay your bills, buy food, or cover rent because your bank account — the one the law said was protected — is frozen solid, and the institution holding your money is one of the most powerful corporations on Earth.

The people affected by this practice were judgment debtors. That label matters, because it carries a stigma designed to make you stop caring. Judgment debtors are people who owe money — to a landlord, a medical provider, a creditor — and a court has ruled against them. Society is conditioned to read that and think: they brought it on themselves. But owing a debt does not mean you forfeit all legal rights. New York State law explicitly carves out protections for exempt funds precisely because legislators understood that grinding people into total destitution serves no social purpose. Bank of America’s practices voided those protections in practice, even when the law preserved them on paper.

The settlement agreement itself tells a story about power and silence. Section 13.8, titled Non-Disparagement, requires that the class representatives, their attorneys, and their spouses refrain from making any negative or disparaging remarks about Bank of America related to this case — including on the internet or in any other media. The people who fought for thirteen years to expose this practice are, as part of the price of settlement, legally prohibited from speaking freely about what the bank did to them. Section 13.5 goes further: any press release about the settlement must be reviewed and approved by Bank of America before publication. The bank froze their accounts. Then it got to freeze their words.

Class representatives Dolores Jackson, Shawn Jackson, and Odamis Villa each stood as named plaintiffs for thirteen years. The settlement awards them a proposed $13,000 each (roughly the cost of six months of average American health insurance premiums) as a “Service Award” for carrying that burden. After a decade-plus of litigation, of having their names attached to a public lawsuit against one of the world’s largest financial institutions, that is the formal recognition the system offers. The remaining funds go to the broader class, distributed on a pro-rata basis — meaning each individual class member receives a fraction of whatever is left after attorneys’ fees (up to one-third of the total fund) and service awards are paid out.

Legal Receipts: The Bank’s Own Words

These are direct passages from the class action settlement agreement, filed October 22, 2024. Read them slowly.

“As of August 2017, when processing restraints, BANA no longer aggregates debtors’ accounts prior to calculating the statutorily exempt amounts. The statutory exemption is applied to each account belonging to a judgment debtor prior to calculating the restrained amount.”

— Section 1.6(a), Settlement Agreement. The bank changed this practice in 2017. The lawsuit was filed in 2011. People were harmed for at least six years under this practice before it changed.

“As of February 2023, BANA ceased its practice of automatically issuing checks for exempt amounts to judgment debtors. When BANA is served with a restraining notice or levy with respect to a judgment debtors’ account(s), the judgment debtor will be able to utilize each such account in the normal course, limited, however, to the amount of exempt funds to which they are entitled under New York State and federal law.”

— Section 1.6(b), Settlement Agreement. “Normal course” — a phrase describing basic account access — had to be written into a legal settlement agreement in 2024 to force the bank to allow it.

“BANA acknowledges and recognizes that but for specific representations made by BANA in the settlement negotiation process as to what confirmatory discovery will reveal, Petitioners would not have agreed to the Settlement.”

— Section 7.4, Settlement Agreement. The entire settlement rests on the bank’s own data about how many accounts it restrained and how many NSF fees it charged. If that data turns out to be materially wrong, the deal could collapse.

“Class Representatives and Class Counsel represent that they and their spouses, attorneys and agents, successors and assigns, or representatives of any kind shall refrain from making any negative or disparaging remarks about BANA with regard to the subject matter of this special proceeding. The agreement in this Paragraph includes, but is not limited to, refraining from the publication of any negative or disparaging remarks on the Internet, or in any other media.”

— Section 13.8, Settlement Agreement. The people who fought this case for 13 years are now contractually barred from criticizing the bank’s conduct publicly. This clause covers their spouses.

“This Agreement, whether or not consummated… shall not be offered or received against BANA or any other Released Party as evidence of, or construed as, or deemed to be evidence of any presumption, concession, or admission by BANA or Released Parties concerning the truth of any fact alleged by the Class Representatives…”

— Section 4.1(a), Settlement Agreement. Standard legal language — but it means Bank of America pays $2.85 million (enough to cover rent for roughly 760 American families for a full year) and the legal record reflects zero admitted wrongdoing.

Where the $2.85 Million Actually Goes

The settlement fund is $2,850,000 (enough to cover rent for roughly 760 American families for a full year). But class members do not receive all of it. Attorneys’ fees can consume up to one-third of the total — that’s up to $950,000 (enough to buy a median-priced American home). Service awards of $13,000 each (roughly six months of average American health insurance premiums) go to the three named plaintiffs. What remains gets split pro-rata among all class members.

Any funds that class members do not claim — checks that go uncashed for 180 days — get sent as “cy pres” to the National Consumer Law Center. That is a better outcome than the money returning to Bank of America, but it still means that some individual class members will receive nothing simply because they moved, changed email addresses, or never learned about the settlement.

Societal Impact Mapping

Economic Inequality: The System Punishing People for Being Poor

Judgment debtors are, by definition, people who have already lost a financial fight. A creditor pursued them through the courts and won. They are disproportionately low-income, disproportionately from communities of color, and disproportionately living in expensive cities like New York where the margin between stability and crisis is measured in single paychecks. New York State’s exemption laws exist to prevent complete financial annihilation — they are a legislative acknowledgment that even people who owe money need to eat, pay rent, and keep the lights on.

Bank of America’s account-aggregation practice directly undermined those protections. By pooling multiple accounts and applying a single exemption calculation, the bank effectively reduced the amount of legally protected money available to the people who needed it most. This was not a bug in the system; it was a practice the bank maintained for years after a lawsuit was filed against it, changing course only in August 2017 — six years into the litigation. The people affected during those six years had no recourse other than to fight a legal battle against one of the largest banks in the world.

The NSF fee element compounds the injury. A non-sufficient fund fee is charged when an account lacks the money to cover a transaction. Bank of America was, according to the settlement’s confirmatory discovery requirements, charging these fees on accounts it had restrained. The settlement specifically required the bank to certify that NSF fees were imposed on no more than 2% of all restrained accounts — a threshold that, if exceeded, could trigger renegotiation of the entire deal. The fact that this cap was written into the agreement signals that the parties considered it a real risk, not a hypothetical one.

The structural inequality embedded in this case runs deeper than one bank’s practices. Wage garnishment, account restraints, and debt collection are industries built on the financial vulnerability of people who cannot afford lawyers, cannot take days off work to fight in court, and cannot absorb the shock of a frozen account. The $2.85 million settlement (enough to cover rent for roughly 760 American families for a full year) represents the outcome when a law firm takes that fight on behalf of an entire class. Without that intervention, every individual harmed by Bank of America’s practices faced that fight alone.

Public Health: Financial Stress as a Health Crisis

The source material does not include medical data or documented health outcomes for class members. However, the documented practice — freezing accounts, blocking access to exempt funds, charging fees on restrained money — describes conditions that public health research consistently links to severe psychological and physical stress outcomes. Financial insecurity is one of the most well-documented social determinants of health. When a person’s bank account is frozen and they cannot access legally protected money, they face cascading consequences: inability to fill prescriptions, inability to buy food, inability to pay utility bills in winter or summer, and the grinding psychological weight of knowing the system is working against them while they have no immediate recourse.

The thirteen-year duration of this litigation is itself a public health data point. For over a decade, class members lived under the shadow of a bank practice that the law firm representing them believed was illegal. Some of those people may have moved, lost contact with the legal system, or simply given up — which is why the settlement includes skip-trace provisions and multiple attempts to locate class members who cannot be found at their last known address. The settlement’s provisions for uncleared checks — those not cashed within 180 days — going to cy pres rather than back to Bank of America reflects an implicit acknowledgment that some class members will be unreachable, potentially because the financial harm they suffered had lasting consequences on their stability.

The Cost of a Conscience

What Now: Who’s Watching and What You Can Do

Corporate Roles to Watch

• Senior Vice President & Associate General Counsel, Bank of America — The executive contact listed in the settlement agreement for all legal correspondence regarding this matter. This role oversaw the bank’s legal posture throughout the settlement process.
• Bank of America, N.A. (BANA) — The entity that agreed to permanently change its account restraint practices. Under Section 1.7, those changes are meant to be permanent unless a change in law requires otherwise. No external enforcement mechanism guarantees compliance.

Regulatory Watchlist

• Consumer Financial Protection Bureau (CFPB) — The federal agency with jurisdiction over bank account practices and consumer financial protection. File a complaint at consumerfinance.gov if your bank account has been wrongly restrained.
• New York State Department of Financial Services (NYDFS) — The state regulator with oversight over Bank of America’s New York operations and the bank accounts at issue in this case.
• Federal Reserve Board — Bank of America’s primary federal regulator as a bank holding company. Public comments and formal complaints can be filed through the Federal Reserve’s consumer complaint portal.
• New York State Attorney General’s Office — Has authority to investigate unfair and deceptive business practices by banks operating in New York. The Consumer Frauds Bureau is the relevant division.

What You Can Actually Do Right Now

If your bank account has ever been restrained as a judgment debtor, contact a consumer rights attorney immediately and ask specifically about EIPA (Exempt Income Protection Act) protections in your state. Many legal aid organizations offer free consultations. Know your exemption rights before a creditor acts — not after.

Connect with mutual aid networks in your city and neighborhood credit unions that are not extracting profit from your vulnerability. Organizations like the National Consumer Law Center — which receives cy pres funds from unclaimed settlements like this one — publish free guides on debt collection rights. Support them. Share this article. The non-disparagement clause in this settlement stops the class representatives from speaking. It does not stop you.