Bank of America CEO Brian Moynihan says there’s 1 big legal settlement left
05/28/2014 6:25 PM
05/28/2014 6:26 PM
Bank of America CEO Brian Moynihan says he thinks the Charlotte bank has put all of its major legal settlements behind it, save one: an impending deal with the U.S. Department of Justice.
“The rest of the stuff is pretty well done,” he told investors at a conference hosted by financial research firm Sanford C. Bernstein & Co. in New York. “We’ve got a myriad of cases that we’ll work through, but of the big stuff, that’s really the one that’s left out there.”
Bank of America has spent the last three years battling lawsuits and investigations, primarily related to mortgages originated by the bank and Countrywide Financial Corp., the subprime lender Bank of America bought in 2008.
The string of settlements began in earnest in mid-2011, when the bank came to an $8.5 billion agreement with a group of institutional investors who bought Countrywide mortgage bonds. The most recent came in March, when Bank of America settled with the Federal Housing Finance Agency in a $9.5 billion deal.
In between, the bank has spent more than $60 billion on legal fees, settlements and agreements to repurchase loans that ultimately went sour.
“It’s taken longer to resolve the mortgage stuff than we all would have hoped,” Moynihan said at the conference Wednesday.
The Department of Justice settlement would cover mortgage-backed securities sold by Bank of America where the government believes the bank misrepresented their quality. Some news reports have put the price tag at $10 billion or greater.
Bank of America shares closed Wednesday down about a half of a percent, at $15.14.
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