Bank of America has agreed to pay out a record $17 billion (£10.2 billion) to settle claims around its role in the sale of mortgage-backed securities in the run up to the financial crisis.
The bank is to pay $10 billion in cash with the other $7 billion to be used for consumer debt relief, according to the Associated Press. The settlement is arising from the slew of recent banking scandals and the biggest in US history.
AP reports that agreement was finally reached between Bank of America CEO Brian Moynihan and attorney general Eric Holder. It is understood that the deal will also require Bank of America, along with Countrywide Financial and Merrill Lynch, which it later acquired, to acknowledge the fact that they misrepresented the quality of packaged loans that it sold on to investors.
The three institutions combined issued just under £1 trillion, or $965 billion of mortgage-backed securities between 2004 and 2008.