The Bank of America Has To Pay Actual America $17 Billion
Everyone’s least favorite bank (just me?) has reached a settlement with the Department of Justice, as the Wall Street Journal reports. It is the biggest effing settlement the U.S. has ever made with a single corporation, and is equal to three years of the bank’s profits.
PROFITS. The settlement is re: Bank of America purchasing Merrill Lynch and Countrywide Financial Corp. when they were about to flame out mid-housing crisis, a move which as you can imagine, raised a few eyebrows. Lest you think $17B’s is a fuckton of money, they already spent $60 billion on legal fees, fighting this thing for the past four and a half years.
What is money, anyway?
In negotiations with the Justice Department, the bank’s lawyers argued the firm was being unreasonably punished for the actions of Merrill and Countrywide, which together issued most of the questionable mortgage securities at the center of the probe. But prosecutors pushed back, saying the bank had benefited from Merrill and bought Countrywide without any government prodding. The bank also lobbied unsuccessfully to pay most of the settlement in consumer aid to homeowners, which would be less burdensome on the company’s bottom line.
More than $9 billion of the settlement is expected to be in cash.
So where does the money go? Much of it will go to a few key states, and although there is not really any accountability or mandatory transparency about what the state does with said money, WSJ speculates that much like the DOJ’s settlements with Citigroup and J.P. Morgan Chase, states will funnel this money back into public pension funds that got screwed buying mortgage securities.
Remember: a “security” is not secure!
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