Bank of America has agreed to a record-breaking $16.65 billion settlement
Bank of America and the Justice Department have finally reached a settlement, with Bank of America agreeing to pay $16.65 billion to end the federal and state investigations into its sale of toxic mortgage securities during the subprime housing boom, making this the largest settlement by a single company in United States history.
The landmark settlement, which was announced in Washington this morning by Attorney General Eric H. Holder Junior, requires that Bank of America pay a $9.65 billion cash penalty and provide somewhere around $7 billion in relief to homeowners and blighted neighborhoods.
“The size and scope of this multibillion-dollar agreement go far beyond the ‘cost of doing business,’” Mr. Holder said in a prepared statement. “This outcome does not preclude any criminal charges against the bank of its employees. Nor was it inevitable over these last few weeks that this case would be resolved out of court.”
“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,” he said. “This is appropriate given the size and scope of the wrongdoing at issue.”
“We believe this settlement, which resolves significant remaining mortgage-related exposures, is in the best interests of our shareholders, and allows us to continue to focus on the future,” Bank of America’s chief executive, Brian T. Moynihan, said in a statement.
Read more about the story at The Wall Street Journal.