Bank of America to pay largest civil settlement in American history

Will settle probes from multiple state and federal agencies regarding its sale of mortgage securities

Already the subject of some sizeable mortgage-related settlements in the past five years, Bank of America announced on Aug 20 that it has agreed to pay the Department of Justice (DOJ) close to $17 billion – the largest civil settlement with a single entity in American history—to settle multiple state and federal investigations into the way it packaged and sold mortgage-backed securities on the run up to the financial crisis. In addition to federal probes, the settlement will end investigation pending from the attorneys general of California, Delaware, Illinois, Kentucky, Maryland and New York.

The settlement ends probes aimed at not only Bank of America but also its Countrywide Financial Corporation and Merrill Lynch subsidiaries. Close to $10 billion of the total will address the various state and federal investigations of the banking group, $5 billion of which will directly address fines levied at the bank under the Financial Institutions Reform, Recovery and Enforcement Act.

Executive Editor

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Chris DiMarco

Chris DiMarco, Executive Editor of InsideCounsel magazine, has a background in multimedia production with previous involvement in projects in which he developed and created content...

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