It's safe to say that Bank of America (BAC -0.13%) is ready to put 2013 in the rearview mirror. By my estimate, over the past 12 months, the nation's second largest bank by assets has incurred just under $20 billion in legal fines and settlements -- and that's excluding the hundreds of millions, if not billions, of dollars it paid to attorneys.
The list of alleged misdeeds -- none of which Bank of America formally copped to, of course -- includes discriminating against women and minorities, illegally robo-calling customers' cell phones without consent, hiding material information from its own shareholders about its 2008 purchase of Merrill Lynch, and misleading third-party investors into buying faulty mortgage-backed securities. And this is just to name a few.
The list is so numerous that it's hard for even experts to keep track of the bank's mounting legal tab. It's for this reason, in turn, that I compiled the following table of Bank of America's most notable settlements (and related legal resolutions) for the year that's coming to a close. As an investor in the bank myself, here's to hoping that 2014 will be better!
Approximate Settlement Date |
Description |
Cost |
---|---|---|
Jan. 7 |
Settlement with Fannie Mae resolving claims that B of A sold tens of billions of dollars' worth of faulty mortgages to the government-sponsored entity. |
$10.3 billion |
Jan. 7 |
On the same day as the Fannie Mae settlement, B of A joined with nine other lenders to resolve claims of foreclosure abuse related to the financial crisis. The aggregate settlement for all participants was $8.5 billion. |
$2.9 billion |
Feb. 1 |
Settlement to resolve a class action lawsuit alleging that B of A violated the Real Estate Settlement Procedures Act by failing to respond to mortgagees' requests for information relating to the servicing of their home loans. |
$19 million |
Feb. 15 |
Settlement to resolve allegations that Merrill Lynch failed to pay proper overtime to its client associates. |
$12 million |
April 2 |
Settlement with the National Credit Union Administration to resolve claims related to sales of mortgage-backed securities to corporate credit unions that led them to fail. |
$165 million |
April 5 |
Settlement to resolve claims that B of A misled investors about its 2008 acquisition of Merrill Lynch by failing to disclose billions of dollars in pre-approved bonuses to Merrill's executives and employees. |
$2.4 billion |
April 17 |
Settlement with investors in class action lawsuit involving Countrywide-issued mortgage-backed securities. |
$500 million |
May 6 |
Settlement to resolve claims brought by mortgage-bond insurer MBIA related primarily to toxic mortgages originated by Countrywide Financial. |
$1.7 billion |
June 4 |
Fined by the Financial Industry Regulatory Authority after an investigation found that B of A's brokers steered retail investors toward a type of mutual fund that was riskier than what they were seeking. |
$2 million |
June 14 |
Settlement to resolve claims that Countrywide Financial "deceptively lured consumers into buying loans with higher interest rates than originally promised." |
$100 million |
Aug. 28 |
Settlement to resolve a class action racial discrimination lawsuit alleging that Merrill Lynch segregated its workforce by, among other things, steering black brokers into clerical positions and reassigning their accounts to white workers. |
$160 million |
Sept. 6 |
Settlement to resolve a class action gender discrimination lawsuit brought by female brokers alleging they were "paid less than men and deprived of handling their fair share of lucrative accounts." |
$39 million |
Sept. 23 |
Fined by U.S. Department of Labor for hiring practices that kept qualified black job applicants from getting jobs. |
$2.2 million |
Sept. 30 |
Settlement to resolve claims that B of A employees made harassing debt collection calls to customers' cell phones in violation of the 1991 Telephone Consumer Protection Act. |
$32 million |
Oct. 23 |
Found liable for fraud over defective mortgages sold to Fannie Mae and Freddie Mac as a part of a shoddy home loan process at Countrywide known as the "Hustle." |
$850 million* |
Dec. 2 |
Settlement with Freddie Mac related to faulty mortgages sold to the government-sponsored entity from 2000 to 2009. |
$404 million |
Dec. 12 |
Settlement with the Securities and Exchange Commission related to the structuring and sale of complex mortgage securities to institutional investors in 2006 and 2007. |
$132 million |