The bank’s directors have okayed the broad strokes of the settlement, according to a CNBC report. Fine details are expected to be decided upon in the next few days. The final deal will most likely include $9 billion in cash penalties and between $7 billion and $8 billion in consumer relief, CNBC reported.
The settlement comes after months of contentious talks between Bank of America and the government. The bank initially suggested a settlement of around $13 billion, while the Justice Department insisted on $17 billion and refused to budge. Last month, Attorney General Eric Holder snubbed BOA head Brian Moynihan when the latter asked to meet. Holder said the talks hadn’t progressed far enough to make meeting worthwhile.
The bank, which had the biggest legal exposure to fraud claims over mortgage-backed securities in the wake of the financial crisis, has already agreed to pay $60 billion to settle numerous other claims of fraudulent sales of mortgage-backed securities, CNBC reported.
If the settlement is finalized, it will break the previous record of $13 billion, set when JPMorgan settled with the government last year over its sale of shoddy mortgage bonds.
Bank of America’s board of directors support a proposed settlement of more than $16 billion to end government probes into its sale of toxic mortgage-backed securities. The settlement will be the largest federal settlement with a single corporation in U.S. history.