The Federal Reserve ordered Bank of America to halt its planned dividend payout and share buyback, saying that the bank submitted incorrect data for recent tests of its capital strength.
The Fed said that the bank has to resubmit its capital plan for review within 30 days, addressing "quantitative errors" in its calculation of its capital levels.
"Until receiving notice that the Federal Reserve has not objected to the new capital plan, Bank of America will not be able to increase its capital distributions," including distributions approved after the Fed conducted stress tests on the country's largest banks last month.
After passing the late March stress tests, Bank of America announced an increase of its quarterly dividend to five cents from one cent a share and a new $4 billion share buyback.
The bank said Monday it was revising downward its capital levels and rations after correcting the calculations. It said it expected to cut back the capital plan once the new data is accepted by the Fed.