Citigroup is nearing a deal with the US Department of Justice (DoJ) to settle a civil investigation into the bank’s sale of mortgage investments, according to reports which estimate that the payment could be up to US$7bn.
The potential settlement would come after months of negotiations and would avert a federal lawsuit over the issue. Reports that an agreement is near marks a contrast to just a few weeks ago when the two sides were apparently far apart, with Citi offering US$4bn while the government was demanding US$10bn. The DoJ warned that it would proceed with a lawsuit unless the bank significantly raised its settlement offer.
The two sides are believed to still be hammering out the details. Reports that cite a total settlement figure of US$7bn suggest that Citi will pay around US$4bn in cash. A further US$3bn would include so-called soft dollar penalties, including mortgage modifications and other forms of relief to homeowners, and possibly payments to US state attorneys general involved in the case.
The total amount is widely expected to exceed the US$2bn that some Wall Street analysts initially estimated that Citi would be liable to pay, although more recent estimates have pitched it closer to US$6bn.
The Citi deal raises the stakes for Bank of America (BoA), which is likely to be the next major US bank to settle its mortgage case with the DoJ. Negotiations between the bank and federal prosecutors are believed to have largely gone dormant in recent weeks as the department focused on resolving its case with Citi.
On the second day of this year's AFP conference Trump's potential tax reform, using synthetic debt and the expected benefits of SWIFT GPI were all hotly discussed topics.
Today CGI and GTNews have announced the launch of the fifth annual Transaction Banking survey report, which offers which offers critical insight into the corporate-to-bank relationship.
On-Demand Treasury Management Solutions continue to gain increased adoption in the US and EMEA regions.
Treasurers are being expected to do more work with fewer resources than ever before, so it is little wonder that the automation of day-to-day operations was highly discussed on the second day of EuroFinance, the annual treasury event held in Barcelona this week.