Bank of America (BAC) stock is down after news leaked of a settlement deal with the US Department of Justice costing BOA more than $13 billion — in addition to the billions the bank will already pay.
BAC stock is down 1.6% in early morning trading.
The deal would also put an end to the additional state investigations as well.
Bloomberg reports that the deal with the second biggest lender in the US could come within months.
The [$13 billion] settlement would come on top of the $9.5 billion the bank agreed last month to pay to resolve Federal Housing Finance Agency claims, said two people who asked not to be named because the negotiations are private.
If the Justice Department gets its way, the case against Bank of America will eclipse JPMorgan Chase & Co.’s record $13 billion global settlement over similar issues in November. That settlement, which included a $4 billion agreement with the FHFA, encompassed loans JPMorgan took over with its purchases of Washington Mutual Inc. and Bear Stearns Cos.
Investors will recall that most of the “bad loans” fell into Bank of America’s lap after it purchased Countrywide and Merrill Lynch.
There are current eight other lenders being investigated by the DOJ and state attorneys general regarding similar charges.
BAC stock is up 3.5% year to date.