How Bank of America’s $16.65 Billion Settlement Compares
(AP Photo/Chuck Burton)
In the largest civil settlement ever struck between the U.S. government and a company, Bank of America has agreed to a $16.65 billion settlement with the Justice Department to resolve allegations of mortgage-related misconduct in the run-up to the 2008 financial crisis.
Under the agreement, which was announced on Thursday, Bank of America will pay a record $9.65 billion cash settlement to the federal government and six states, and provide an additional $7 billion in consumer relief for struggling homeowners.
“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.
In the five years since the crisis, government authorities have won nearly $83 billion in credit crisis and mortgage-related settlements from the nation’s six largest banks by assets. Over that same period, the banks have earned more than $320 billion in profits.
The penalties for Bank of America, the second biggest U.S. bank, have more than matched the size of its profits since 2009. But for its largest competitors, the price tag associated with crisis-era litigation has been far less painful. At Goldman Sachs, for example, fines related to the crisis have equaled less than 2 percent of profits since 2009.