Bank of America Could Soon Be on the Hook for Another $13 Billion

Recent revelations suggest that Bank of America could still owe upwards of $13 billion in legal liabilities.

Apr 26, 2014 at 8:00AM


Just when it seemed like Bank of America (NYSE:BAC) had finally cleaned up its legal liabilities, four more seemingly sprung out of nowhere. Add up the potential costs to the Charlotte, N.C.-based bank, and you get somewhere in the neighborhood of $13 billion.

The lion's share of the claims relates, like most of the bank's legal woes, back to the financial crisis. In one, the government is seeking "billions of dollars above" a $2.4 billion charge that Bank of America took for legal reserves in the latest quarter. In another, Ambac Financial Group (NASDAQ:AMBC) wants a $2.5 billion pound of flesh. And in a third, American International Group (NYSE:AIG) is trying to squeeze $5 billion out of the bank as penance for Countrywide's former misdeeds.

As we've come to find out, moreover, the nature of the claims against Bank of America extends far beyond malfeasance in the mortgage market. Namely, recent reports suggest that it's concluding negotiations with the Consumer Financial Protection Bureau over allegations that it coerced customers into paying for credit card services that were either worthless or entirely unwanted.

The net result, as Motley Fool contributor John Maxfield discusses in the video below, is that Bank of America still has considerable ground to cover before it has fully and finally atoned for its past indiscretions -- click here for a comprehensive list of the bank's settlements since 2008.

Bank Of America

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John Maxfield has no position in any stocks mentioned. The Motley Fool recommends American International Group and Bank of America. The Motley Fool owns shares of American International Group and Bank of America and has the following options: long January 2016 $30 calls on American International Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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