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U.S. Attorney General Holder won’t meet with Moynihan over settlement

DAVOS WEF 2014
Chris Ratcliffe - Bloomberg
Brian Moynihan, president and chief executive officer of Bank of America Corp.

U.S. Attorney General Eric Holder has formally refused to meet with Bank of America CEO Brian Moynihan as the two sides continue to dispute terms of a potential multibillion-dollar settlement involving troubled home loans, a person familiar with the matter told the Observer on Wednesday.

The second-largest U.S. bank by assets had requested a meeting between Holder and Moynihan to reach a resolution over the issue. Bank of America and federal authorities remain at odds over the total settlement amount as well as how much of the total would be in the form of consumer relief versus cash, the person said.

In a mid-June letter signed by Holder and addressed to Moynihan, the attorney general said a meeting would not be productive at this time because the parties remain too far apart, the person said.

Holder’s letter to Moynihan was first reported Wednesday by news agency Reuters.

Bloomberg, citing people familiar with the matter, reported last month that prosecutors halted talks with the bank June 9 after it offered to pay more than $12 billion, below the $17 billion the Justice Department sought.

Bank of America spokesman Lawrence Grayson declined to comment. A spokesperson for the Justice Department also declined to comment.

The Justice Department is seeking to extract a settlement from Bank of America to resolve probes into the sale to investors of securities backed by home loans that soured and contributed to the financial crisis.

With talks stalled, the Justice Department has been moving ahead with plans to file a civil lawsuit against the bank, according to the source.

Last month, a source familiar with the matter told the Observer the accord would be a “global” settlement to resolve other outstanding mortgage-related civil probes, including a lawsuit filed last year by Charlotte-based U.S. Attorney Anne Tompkins over “prime” mortgages that allegedly were riskier than advertised.

Last year, JPMorgan Chase reached a $13 billion civil settlement with the U.S. government and state authorities over mortgage-backed securities.

Federal authorities are in talks with Citigroup to resolve a civil investigation involving mortgage-backed securities.

Roberts: 704-358-5248; Twitter: @DeonERoberts
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