Attorneys for the bank met with Justice Department officials Wednesday to continue talks. The government has demanded $17 billion from the bank, including a cash penalty of $10 billion and $7 billion in payments to struggling homeowners. The bank was offering $13 billion – a $4 billion cash penalty and the rest in homeowner relief.
On Wednesday, Bank of America upped its offer to $14 billion, including a $7 billion cash penalty, according to a New York Times report. If accepted, the $14 billion settlement would break the previous record for a settlement with a single entity, last year’s $13 billion agreement with JPMorgan Chase.
But the government, still seeking a larger cash penalty, has refused the offer, according to the Times. If a settlement is not reached soon, the Justice Department may sue the bank.
And the lawsuit may well be successful. Bank of America doesn’t exactly have a great track record fighting government litigation. On Wednesday, the bank was ordered to pay a $1.3 billion penalty for fraudulent mortgage-bond sales in its Countrywide unit.
Bank of America wants to be done with government probes. The bank significantly upped its settlement offer to resolve a Justice Department probe over mortgage-backed securities, but the two sides still haven’t reached an agreement.