California unemployment: Lawmakers demand to know why Bank of America is draining EDD accounts

SAN FRANCISCO -- KABC and our sister station KGO in San Francisco have been reporting on the latest difficulty facing unemployed Californians. Bank of America has been draining money out of thousands of EDD bank accounts -- leaving many with no money to live on.

Now a bipartisan group of 59 state lawmakers has fired off a letter to Bank of America's CEO demanding to know why it's happening.

RELATED: Jobless Southern Californians left with twice the frustration from EDD fraud, Bank of America backlog

A number of unemployed Californians have been hit twice by the pandemic - first losing their jobs and then getting caught up in scams that have tied up their benefits and drained funds from their accounts.

The bank is vague with answers, only citing the Employment Development Department's crackdown on fraud but lawmakers say it's taking money from honest workers just when they need it most.

Michael Conant, a laid-off hotel worker in San Francisco, watched as all $16,800 evaporated from his EDD account.

"You guys took $16,000 from the account. Where did it go?" he asked. "They left nothing in there. There was nothing in the account," said Conant.

RELATED: Why is Bank of America draining EDD bank accounts?

Bank of America has been draining money out of countless EDD accounts, leaving many Californians bewildered and broke.

The same thing happened to Anthony Serafino of San Francisco. His EDD account was suddenly frozen, and when the bank unlocked it, all his money was gone.

"The money got taken away. They froze my account and took the money," said Serafino. "It was in different increments, but it added up to $10,000."

Now, unemployed workers across California are flooding the offices of many state lawmakers, saying benefits disappeared from their accounts, too.

"Bank of America has not provided any answers as to why this is happening. There's a bit of finger pointing going on and it's absolutely unacceptable. It's just another example of failure of our unemployment system during this pandemic and recession," said Assemblymember David Chiu (D - San Francisco).

RELATED: EDD mistakenly takes $10K from CA man's account

One San Francisco man had a shock when the EDD clawed back thousands of dollars in benefits -- a mistake stemming from their fight against scammers.

Now, a bipartisan group of 59 state legislators is demanding answers from Bank of America, firing off this letter to CEO Brian Moynihan, saying: "Every legislative office in the state has experienced an unprecedented number of constituents" asking to resolve problems with EDD and Bank of America.

The letter poses a list of questions to be answered by Tuesday, Dec. 1.

Among them:

• "Why is Bank of America taking funds and freezing (debit) cards?"
• "What needs to happen... to have the funds restored?"
• "Has Bank of America had to pay penalties... due to fraud on its cards?"

Bank of America told KGO that it will respond directly to legislators, but in general would say: "We are working with the state and law enforcement to identify and take action against fraudulent applicants, protect taxpayer money and ensure that legitimate applicants can access their benefits."

It was not clear if the bank will provide any specific answers to all these questions.

"This involves a contract between the state and Bank of America and from my perspective we're going to have to revisit that contract because it is clearly failing the people of California," said Assemblymember Chiu.

RELATED: Insiders reveal how scammers are stealing millions in CA unemployment benefits

It's a story you'll only see on ABC7 News: More local charges are likely to be filed in an inmate unemployment benefits scam sweeping the country.

Assemblymember Chiu, who signed the letter, says workers are losing benefits when they need them most.

"They're having trouble putting food on the table or paying the rent... for the debit cards to lead to draining of funds is not acceptable," said Assemblymember Chiu.

"I'm on a beyond-a-shoestring budget. I never felt food insecure my whole life," said Conant. "There's emotions that go behind that. You feel cheated, more or less."

Anthony Serafino concurs. "It was stressful. Yeah, really stressful."

RELATED: Fraudulent CA unemployment claims filed for Scott Peterson, Isauro Aguirre, DA says

A California prosecutor says someone has filed unemployment claims in the name of convicted murderers Scott Peterson and Isauro Aguirre among thousands of other inmates.