Bank of America is nearing a $16bn to $17bn record settlement with the U.S. Justice Department to end probes into sales of mortgage-backed bonds that fuelled the financial crisis, according to a person familiar with the matter.
Bloomberg News reports that under the proposed terms, the bank would pay about $9bn in cash and the rest in consumer relief to settle federal and state claims, according to the person, who asked not to be named because the negotiations are private. Details of the proposed accord, such as the relief and a statement of facts, are still being negotiated, the person said.
The outlines of the deal were reached last week after a phone call between Attorney General Eric Holder and Bank of America Chief Executive Officer Brian T. Moynihan, the person said. During the July 30 call, Holder said that the government was ready to file a lawsuit in New Jersey if the bank didn’t offer an amount closer to the department’s demand of about $17bn, according to the person.
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