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US reaches historic $16.7bn settlement with Bank of America

Alex Wong, Getty Images, AFP I Attorney General Eric Holder

Bank of America Corp has reached a $16.65 billion settlement with U.S. regulators to settle charges that it misled investors into buying troubled mortgage-backed securities.

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The settlement announced on Thursday by the U.S. Department of Justice calls for the second-largest U.S. bank to pay a $9.65 billion cash penalty, and provide about $7 billion of relief to struggling borrowers.

It is expected to resolve the vast majority of the Charlotte, North Carolina-based bank’s remaining liabilities tied to its purchases of Countrywide Financial Corp, once the nation’s largest mortgage lender and Merrill Lynch & Co.

Bank of America said the accord is expected to reduce third-quarter earnings by about $5.3 billion before taxes, or about 43 cents per share after taxes.

(REUTERS)
 

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