A source closely related to the matter has said that Bank of America (BofA) has “tentatively agreed to pay between $16 billion and $17 billion to settle an investigation into its sale of mortgage-backed securities before the financial crisis,” according to the Associated Press (AP).
The source, who spoke on the condition of anonymity, said the agreement, by far the largest Justice Department settlement, could fall apart as it has not been finalized. The sides had, however, reached an agreement following a conversation with Attorney General Eric Holder and BofA CEO Brian Moynihan.
The settlement would require the bank to pay approximately $9 billion cash, with the remaining amount going toward consumer relief.
This agreement comes on the heels of a ruling by Judge Jed S. Rakoff of the Federal District Court of Manhattan which ordered BofA to pay a $1.3 billion penalty in another federal mortgage case. Nine months ago, a jury found BofA liable for selling questionable loans to government-sponsored enterprises Fannie Mae and Freddie Mac.
When the Obama administration established the Interagency Financial Fraud Enforcement Task Force, Holder said“We will be relentless in our investigation of corporate and financial wrongdoing, and will not hesitate to bring charges, where appropriate, for criminal misconduct on the part of businesses and business executives.”
BofA, along with other corrupt banks like JP Morgan and Citigroup, have had to pay out tens of billions of dollars in penalties, but not one person responsible for these crimes has seen any jail time. The Obama administration has refused to demand criminal sanctions, and if you follow the money, it’s not hard to understand why.
All three banks are heavily entrenched in campaign funding. Together they have donated tens of millions of dollars to both Republican and Democratic campaigns. They know that by funding candidates on both sides, they will be able to avoid actual criminal charges and jail time, regardless of which party is in power.
Maybe if small-time criminals who didn’t defraud the American people and destroy the economy donated more money, they could avoid jail time too.