Bank of America Reaches Record Settlement with DOJ
Published at(WASHINGTON) — Bank of America reached a record-breaking $16.65 billion settlement with the Department of Justice on Thursday.
The deal resolves an investigation into allegations that the Charlotte, North Carolina-based bank misled purchasers of mortgage-backed securities prior to the 2008 financial crisis.
The settlement is the largest ever reached between the federal government and a company.
“At nearly $17 billion, today’s resolution with Bank of America is the largest the department has ever reached with a single entity in American history,” Associate Attorney General Tony West said in a statement Thursday.
The previous biggest bank deal involved JPMorgan Chase, which agreed to pay $13 billion for its role in selling flawed mortgage investments.
Bank of America is expected to pay $9.65 billion in cash; the rest will go toward consumer relief.
“This historic resolution — the largest such settlement on record — goes far beyond ‘the cost of doing business,’” Attorney General Eric Holder said in a statement. “Under the terms of this settlement, the bank has agreed to pay $7 billion in relief to struggling homeowners, borrowers and communities affected by the bank’s conduct. This is appropriate given the size and scope of the wrongdoing at issue.”
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