Charlotte, NC, United States (4E) – Bank of America Corp. agreed to pay a record-high settlement of almost $17bn over its mortgage lending, according to people with knowledge of the matter.
The agreement will end a government probe brought by company’s acquisition of Merrill Lynch & Co. and Countrywide Financial Corp. as they nearly collapsed during the financial crisis. The Charlotte, N.C.-based bank is expected to pay over $1bn that will go to a few of states, according to sources familiar with the deal.
The settlement marks the biggest ever amount reached between a single company and the U.S. government, and is about equal to the bank’s total profit for the last three years. The bank has so far spent over $60bn on legal fees related to the financial crisis, and the latest deal would push the figure to close to $80bn.
The settlement could offer a positive development for CEO Brian Moynihan, whose four-and-a-half-year stint as top executive has mostly been spent dealing with litigation.