There are several kinds of small hairy or metallic bees that dig into the soil to nest, hence one common name, digger bees. This is a diverse group that comes from different families and the term digger bee can include the andrenid bees, halictid bees, and colletid bees such as the plasterer and yellow-faced bees. These are solitary bees and native pollinators that are active early in the season. Each female digs a cylindrical underground tunnel as a nest where she reproduces (as opposed to social bees such as honey bees where only the queen reproduces and maintains a colony with the help of sterile workers). The subterranean nest is provisioned with a mixture of nectar and pollen collected from nearby flowering plants. This "bee-bread" is food for the bee's offspring (larvae) that develop in the underground chamber and emerge as adults the following year.
Digger bees are 1/4 to 1/2 inch long and variable in color (mostly shiny metallic or dark, but some with markings of white, yellow or reddish brown). There is one generation of digger bees per summer and once the adults finish perpetuating the species by laying eggs of the next generation there will be no activity till the following spring.
Digger bee nests are commonly located in areas of the landscape where the grass is sparse, either from too much shade, previous drought conditions or other stress. It is tempting to blame the bees for causing the turfgrass to be thin but it is the opposite; the bees are in the yard because the grass was already thin. The entrances to the tunnels (mounds of soil) are disruptive and annoying to the homeowner but are not usually damaging to otherwise healthy turf.
The threat of being stung by digger bees is highly overrated. The bees are docile and not likely to sting unless handled or threatened. There is no nest guarding behavior or attack behavior like there is with social insects such as honey bees and yellowjacket wasps. Control is usually not necessary unless the bees are nesting close to human activity.
Digger bees are important pollinators of several native plants and spring crops. Coexistence rather than eradication is encouraged where possible. If that's not going to happen then rejuvenate the turfgrass by leveling the area and re-establishing a thick turf or ground cover tolerant to the site (shade-adapted, for example). Small numbers of burrow openings can be treated individually with insecticide dust (Sevin or permethrin). Larger infested areas can be sprayed or treated with insecticide granules to discourage the bees when the problem warrants a response.