An internal fight at the U.S. Securities and Exchange Commission is stalling the last piece of Bank of America Corp's record $16.7 billion mortgage settlement with the U.S. government, Bloomberg News reported, citing people with knowledge of the matter.
The settlement, announced in August, has stalled due to a dispute between SEC commissioners over waiving a set of additional sanctions that will kick in when the settlement is entered in court, the report said. The waiver would allow Bank of America to seek investors for private firms.
Two Democratic SEC commissioners are unwilling to grant Bank of America's request for the waiver, while two Republicans are supporting the relief measures. The SEC is in a deadlock as its Chair Mary Jo White, the swing vote, isn’t participating due to a conflict, Bloomberg reported.
Bank of America’s settlement with the government is over sales of shoddy mortgage-backed securities during the run-up to the financial meltdown. The settlement is the largest with a single corporation in U.S. history. The U.S. Department of Justice is requiring the bank to pay $9.65 billion in cash to resolve more than a dozen federal and state investigations and provide $7 billion in consumer relief.
The deal also requires the bank to acknowledge misrepresenting the quality of mortgage-backed securities it sold, as well as those sold by its Countrywide and Merrill Lynch units. Those units, responsible for most of the shoddy loans, were acquired by Bank of America in 2008.
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