BofA agrees to pay $16-$17B in US deal
WASHINGTON – Bank of America tentatively agreed to pay between $16 billion and $17 billion to settle an investigation into its sale of mortgage-backed securities before the financial crisis, a person directly familiar with the matter said Wednesday.
The deal with the bank, which must still be finalized, would be the largest Justice Department settlement by far arising from the economic meltdown. It follows earlier multibillion-dollar agreements reached in the last year with Citigroup and JPMorgan Chase & Co.
The person, who spoke on condition of anonymity because the deal had not yet been announced, cautioned that some details still needed to be worked out and that it was possible the agreement could fall apart.
But the person said the two sides reached an agreement in principle following a conversation last week between Attorney General Eric Holder and Bank of America CEO Brian Moynihan.
The person said the deal calls for the bank to pay roughly $9 billion in cash and for the remainder to go toward consumer relief.
A bank spokesman declined to comment.
The Wall Street Journal first reported details of the settlement on Wednesday.
The Justice Department last year reached a $13 billion settlement with JPMorgan, and last month announced a $7 billion settlement with Citigroup.