Bank of America's Epic $20 Billion Face-Plant

Photo: Flickr/Herve Boinay.

It's safe to say that Bank of America 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



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

*This is the amount sought by the government; the judge has yet to rule on the damages. Sources: Bloomberg, Reuters, The New York Times, The Wall Street Journal, and The Huffington Post.

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John Maxfield owns shares of Bank of America. The Motley Fool recommends and owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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