Bank of America’s big fine

Aug 22, 2014 16:24 UTC

You’d be forgiven for thinking that Bank of America settles crisis-era mortgage cases with the U.S. government once a week or so. But the one this week, at $16.65 billion, is the big one. That is, it’s the biggest settlement to date, eclipsing not only previous settlements by the bank (which now come to a total of about $65 billion), but also all of the similar settlements reached by other banks. JP Morgan paid $13 billion and Citigroup $7 billion recently for similar reasons. The bank will pay “$9.65 billion in cash to resolve more than a dozen federal and state investigations, and provide $7 billion in help to struggling homeowners and communities,” according to Reuters.

Here’s our updated chart of the biggest bank settlements in history:

bank fines (again!)


No individuals were charged, but Bank of America has admitted to some of its terrible pre- and post-crisis behavior. There are, as usual, some embarrassing emails involved. Here are some details from the Reuters story:

Under the out-of-court settlement, Bank of America acknowledged that Merrill Lynch told investors in subprime mortgage bonds in 2006 and 2007 that the loans generally complied with underwriting guidelines, though reviews suggested as many as 50 percent did not.

A statement of facts cites one email in which a Merrill employee wrote: “(h)ow much time do you want me to spend looking at these (loans) if (the co-head of Merrill Lynch’s RMBS business) is going to keep them regardless of issues?”

Bank of America also acknowledged that Countrywide did not generally tell investors the extent to which it made exceptions to its own internal guidelines.

The settlement also covered some post-crisis conduct, including Bank of America’s admission that from 2009 to 2012 it submitted loans for government insurance under the Federal Housing Administration that did not qualify.


It’s not enough of a fine and the Bankers should be jailed. It won’t happen. They own the Government.

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Where JP Morgan $13 billion stacks up against the biggest bank fines globally

Oct 23, 2013 20:03 UTC

This week, JP Morgan hammered out a tentative deal with the government to pay $13 billion over its mortgages practices. Here’s what the biggest bank fines were before this week:

Here’s how those fines stack up by year since the financial crisis:

Historically, JP Morgan’s settlement is enormous — but it’s not necessarily unfair, Peter Eavis writes:

While the overall sum is large, the money will flow to different parties. The largest sum, more than $6 billion, will serve as compensation for investors like pension funds that suffered losses from mortgage securities sold by JPMorgan, Bear Stearns and Washington Mutual, people briefed on the settlement talks said.

Another $4 billion will take the form of relief for struggling homeowners in cities like Detroit. The payout will serve as penance for the bank’s general mortgage practices, and does not stem from any particular mortgage securities or institution, according to one of the people briefed on the talks.

The remaining $2 billion to $3 billion will represent the only fine in the case, according to the people briefed on the talks.

In addition, Reuters reports that most of the settlement will be tax-deductible, making the hit to the bank closer to $9 billion.

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