JPMorgan Chase has reached a tentative $13 billion settlement with the Justice Department over a number of investigations related to to the bank's residential mortgage-backed securities business, according to The Wall Street Journal.
Tweets from The Wall Street Journal and CNBC broke the news Saturday.
News of the deal comes just a day after a JPMorgan was reported to have reached a tentative $4 billion settlement with the Federal Housing Finance Agency over claims it sold bad mortgages to government agencies ahead of the financial crisis
At $13 billion, the potential settlement with the Justice Department exceeds estimates in September that JPMorgan would end up paying as much as $11 billion over the allegations. If finalized, the settlement would be the largest the U.S. government has ever made with a single company, according to WSJ.
JPMorgan may still also face criminal charges, according to a tweet by CNBC reporter John Harwood:
More from Reuters:
WASHINGTON, Oct 19 (Reuters) - JPMorgan Chase & Co has reached a tentative $13 billion agreement with the U.S. Justice Department to settle government agency investigations into bad mortgage loans the bank sold to investors before the financial crisis, a source said on Saturday.The tentative deal does not release the bank from criminal liability for some of the mortgages it packaged into bonds and sold to investors, a factor that had been a major sticking point in the discussions, the source said.
As part of the deal, the bank will likely cooperate in criminal inquiries into certain individuals involved in the conduct at issue, the source, who declined to be identified, said.
Officials at JPMorgan and the Justice Department declined to comment.
Another source close to the discussions characterized a deal as likely, but cautioned that parts of the agreement are still being hammered out, and the settlement could conceivably fall apart.
The record settlement could help resolve many of the legal troubles the New York bank is facing. Earlier this month JPMorgan disclosed it had stockpiled $23 billion in reserves for settlements and other legal expenses to help cover the myriad investigations into its conduct before and after the financial crisis.
The deal is being hammered out by some of the most senior officials at the Department of Justice and the largest U.S. bank. Attorney General Eric Holder and JPMorgan Chief Executive Jamie Dimon spoke on the phone on Friday night to finalize the broad outlines of the broad deal, the first source said.
The bank's general counsel Stephen Cutler and Associate Attorney General Tony West are negotiating a statement of facts that will be part of a final agreement, the source said.
Long considered one of the best-managed banks, JPMorgan has stumbled in recent years, with run-ins with multiple federal regulators as well as authorities in several states and foreign countries over issues ranging from multibillion-dollar trading losses and poor risk controls to probes into whether it manipulated a power market.
In September, as the Justice Department prepared to sue the bank over mortgage securities that the bank sold in the run-up to the financial crisis, JPMorgan tried to reach a broader settlement with DOJ and other federal and state agencies to resolve claims over its mortgage-related liabilities stemming from the bust in house prices.
Dimon went to Washington to meet with Holder on Sept. 25, and discussed an $11 billion settlement at that point.
Some of the problems relate to mortgage bank Washington Mutual and investment bank Bear Stearns, two failing firms that JPMorgan took over in 2008.
The bank and the Justice Department have been discussing a broad deal that would resolve not only the inquiry into mortgage bonds it sold to investors between 2005 to 2007 that were backed by subprime and other risky residential mortgages, but also similar lawsuits from the Federal Housing Finance Agency, the National Credit Union Administration, the state of New York and others.
The broader settlement is a product of a government working group created nearly two years ago to investigate misconduct in the residential mortgage-backed securities market that contributed to the financial crisis. Officials from the Justice Department, the New York Attorney General and others helped to lead the group.
Reuters reported late Friday that JPMorgan and FHFA had reached a tentative $4 billion deal. That agreement is expected to be part of the larger $13 billion settlement.(Full Story)
■BofA May Offer A Checking Account That Curbs Overdrafts: Report
Oct 17 (Reuters) - Bank of America is considering a plan to introduce a checking account that curbs overdraft practices, the Wall Street Journal said, citing people familiar with the bank's strategy.
The bank's plan will not allow customers to overdraw their balances at an automated teller machine or when making an automatic bill payment, the Journal said.
The removal of overdraft abilities would be one option customers could choose under a new checking account program BofA likely will unveil in the coming months, according to the paper.
It wasn't clear whether BofA is considering boosting fees as part of its checking account overhaul. Bank executives haven't made a final decision about the overdraft policy, the newspaper said.
Bank of America could not immediately be reached for comment by Reuters outside of regular U.S. business hours.
If the plan goes through, BofA would be the first big bank to prohibit overdrafts on checking accounts, the Journal said.
BofA's move builds on its decision a few years ago to prohibit customers from overdrawing their account when using a debit card to make purchases.
In 2011, under pressure from customers, the bank reversed course and scrapped plans to charge a $5 per-month debit fee.
Many banks let customers overdraw their accounts in exchange for fees, typically $25 or $35. Critics say the fees disproportionately burden lower-income customers and others who often maintain low account balances.
A few years ago, more than two dozen U.S., Canadian and European lenders were named as defendants in a class-action suit accusing them of charging customers with excessive overdraft fees.
Bank of America paid $410 million and JPMorgan Chase paid $110 million to settle their portions of the nationwide litigation. Those settlements won final court approval in 2011 and 2012, respectively.Also on HuffPost:
The Huffington Post/Reuters | Posted: 10/19/2013 2:44 pm EDT | Updated: 10/20/2013 3:34 am EDT