"This historic resolution — the largest such settlement on record — goes far beyond the cost of doing business," Attorney General Eric Holder told a news conference. "Under the terms of this settlement, the bank has agreed to pay $7 billion in relief to struggling homeowners, borrowers and communities affected by the bank's conduct. This is appropriate given the size and scope of the wrongdoing at issue."
Associate Attorney General Tony West said the settlement of nearly $17 billion is the largest the Justice Department has ever reached with a single entity in American history.
At a news conference, Justice Department officials said the settlement does not release individuals from civil charges, nor does it absolve Bank of America, its current or former subsidiaries and affiliates or any individuals from potential criminal prosecution.
Of the $16.65 billion, almost $10 billion will be paid to settle federal and state civil claims by entities related to residential mortgage-backed securities, collateralized debt obligations and other types of fraud.
An independent monitor will determine whether Bank of America is satisfying its obligations under the settlement.
The settlement also covers Bank of America subsidiaries Countrywide Financial Corp. and Merrill Lynch.
"In the run-up to the financial crisis, Merrill Lynch bought more and more mortgage loans, packaged them together and sold them off in securities — even when the bank knew a substantial number of those loans were defective," said U.S. Attorney Paul Fishman, whose jurisdiction covers the state of New Jersey.
"The failure to disclose known risks undermines investor confidence in our financial institutions," Fishman added.