It’s hard to think of a big business that has had a worse six-year run than Bank of America.
In 2008, it purchased Countrywide and Merrill Lynch, thus becoming a major player in housing and investment banking just as the real-estate bubble collapsed and the country tipped into the worst financial crisis since the Great Depression. Today, the Department of Justice announced that it has reached a whopping $16.65 billion civil settlement related to the bank’s mortgage shenanigans.
Here’s a capsule history of what happened in between, as told through New York Times headlines:
- Ending Rocky Tenure, Chief Is to Leave Bank of America, October 1, 2009
- Bank of America Posts Loss for Year, January 21, 2010
- Cuomo Sues Bank of America, Even as It Settles With S.E.C., February 5, 2010
- Bank of America's Ex-Chief Denies Fraud in Merrill Deal, August 21, 2010
- Ex-Chief Haunts Bank of America, September 1, 2010
- Layoffs Said to Be Near For Bank of America Unit, September 21, 2010
- Bank of America Reports $7.3 Billion Loss, Citing Charges, October 20, 2010
- Two States Sue Bank of America Over Mortgages, December 18, 2010
- Bank of America to Settle Overdrafts Suit for $410 Million, May 24, 2011
- Bank of America Back in an Abyss, August 9, 2011
- Struggling Bank of America Makes Changes in Upper Management, September 7, 2011
- Bank of America Confirms Plan to Cut 30,000 Positions, September 13, 2011
- For Bank of America, a Looming $50 Billion Claim of Havoc, September 28, 2011
- Bank of America Settles Suit for $375 Million, July 18, 2012
- Ex-Bank of America Official Indicted in Muni Bid-Rigging, July 21, 2012
- Bank of America Settles Suit Over Merrill for $2.43 Billion, September 29, 2012
- U.S. Accuses Bank of America Of a 'Brazen' Mortgage Fraud, October 25, 2012
- Mortgage Crisis Lingers On At Citi and Bank of America, January 18, 2013
- Bank of America Faces a Big Lawsuit With Low Legal Reserves, March 7, 2013
- Bank of America to Pay $772 Million in Settlement, April 10, 2014
- Bank of America, Weighed by Legal Costs, Posts Loss, April 17, 2014
In short, BofA struggled to mop up the messes it bought from Countrywide and Merrill, and made a whole host of new ones as the housing market cratered — including encouraging its employees to foreclose and lying to distressed homeowners. No wonder it ranked dead last in a recent poll of the public reputations of 50 big firms, placing it below Monsanto, Goldman Sachs, BP, and even Halliburton.
But maybe, just maybe, the company has turned a page. The improving economy has let it expand its lending portfolio and cut its losses. And with the $17 billion settlement — the largest settlement between the government and a single company in American history — the biggest of its legal fights looks to be over, even though those payments might weigh on its books in the near term and it still has a number of outstanding legal problems.
And it has been costly. The settlement brings BofA’s total bill for its mortgage-related shenanigans to nearly $70 billion. How much did it pay for Countrywide, the font of most of these troubles, back in 2008? $2.5 billion.