Tag Archives: Bank of America

Banks were tested under a hypothetical scenario featuring a deep recession with unemployment peaking at 10 percent, a decline in home prices of 25 percent, a stock market drop of nearly 60 percent and together the banks would see a projected $340 million total in loan losses. Results shows the bank’s aggregate tier 1 common capital ratio, which compares high-quality capital to risk weighted assets, would fall from 11.9 percent in the third quarter of 2014 to a minimum level of 8.2 percent in the scenario. This minimum level is higher than the 5.5 percent measure in 2009 and the 7.9 percent ratio from last year.

In January 2009, Bank of America received its second bailout of $20 million from the Fed to help stabilize the company after its purchase of Merrill Lynch. At the time, Merrill Lynch had lost more than $15 billion in the previous quarter and Bank of America had lost $2.4 billion.

U.S. District Judge Stanley Chesler in Newark ruled that Prudential failed to show sufficient proof that Bank of America and its Merrill Lynch misrepresented the quality of its loans backing securities to ratings agencies, according to reports.

Bank of America was ordered to pay a $1.27 billion penalty in July 2014 as a result of its alleged role in the "Hustle" case. The bank had been fighting to overturn that verdict since, claiming that the HSSL program ended prior to its acquisition of Countrywide.

Both institutions had a rough year in 2014 on the regulatory side of things. In July, Citigroup settled with the Department of Justice for $7 billion over the sale of toxic mortgage-backed securities. A month later, Bank of America settled with the DOJ for a record $16.65 billion over similar matters. The money paid out in penalties and consumer relief in 2014 took a toll on year-end net incomes for both institutions.

Lawmakers are asking why the Justice Department is requiring the lenders to donate money to certain housing counseling agencies approved by HUD as part of their settlements.

The U.S. Securities and Exchange Commission (SEC) agreed to partially waive the additional sanctions that could have been imposed on Bank of America following a record settlement in August over the sale of residential mortgage-backed securities, according to sources familiar with the case in a report from Bloomberg News.

Speaking at an investor conference in New York, BofA chief Brian Moynihan said his firm—frequently listed among the top five mortgage lenders in the nation—has little incentive "to try to create more mortgage availability where the customers are susceptible to default."

According to a motion filed with New York's Southern District Court, Bank of America and US Bancorp agreed to pay $69 million to a number of state and local pension funds that lost millions from their investment in MBS purchased from Washington Mutual before its collapse in 2008.

Bank of America's record $16.65 billion settlement with several government agencies over the sale of toxic residential mortgage-backed securities (RMBS) has been stalled by an internal disagreement within the U.S. Securities and Exchange Commission (SEC), according to sources familiar with the case in a report from Bloomberg.