The settlement is over the bank’s role in the sale of shoddy mortgage-backed securities during the run-up to the financial crisis, according to the Times.
The settlement is expected to be announced within the next week, according to a New York Times report. Citigroup has been negotiating with the government for months on the deal, with negotiations growing so strained at one point that the government threatened to sue the bank if its demands weren’t met.
Citi is expected to pay about $ billion in cash and an additional $3 billion in “soft-dollar penalties,” according to the Times. Such penalties would include mortgage modifications and other homeowner relief and possibly payments to state attorneys general also involved in the case.
Bank of America is also in settlement negotiations with the government, although talks have hit a snag over how much the bank should pay in penalties for shoddy securities sold by its Merrill Lynch unit.
Citigroup is nearing a deal with the Justice Department that could see the bank pony up around $7 billion to settle probes into the sale of mortgage bonds.