Major lender reaches $13bn settlement with Feds

by Ryan Smith21 Oct 2013

JPMorgan Chase & Co. has reached a tentative deal to pay about $13bn to settle claims that it misled Fannie Mae and Freddie Mac about the worthiness of loans it sold them during the lead-up to the financial crisis, the Wall Street Journal reported Friday.

Citing sources “close to the discussions,” the Journal reported that the deal is part of broader settlement talks in which JPMorgan is attempting to resolve several government probes that could result in civil and criminal charges.

JPMorgan has also reached a settlement with the National Credit Union Administration over allegations the bank knowingly sold shoddy mortgage bonds to credit unions. The terms of that settlement were not disclosed, the Journal reported.

JPMorgan said last week that it had set aside $9bn in extra legal reserves in the third quarter, the Journal reported. That gives the bank a total of $23bn to use in its ongoing legal battles.

Between 2008 and 2012, JPMorgan spent $17.7bn on litigation alone, and is currently facing more regulatory enforcement actions than any other U.S. bank, as well as at least seven separate Justice Department investigations.