The latest examples of the seemingly endless government probes of
focus on foreign exchange and
lending practices, the Charlotte, N.C., giant has disclosed.
Banks are filing 10-K annual reports with the
Securities and Exchange Commission this week, scattering news of investigations opening and closing behind them. Morgan Stanley said Tuesday it had reached a $275-million settlement with the SEC staff over subprime mortgage securities.
In its 10-K, also out Tuesday afternoon, Bank of America said “government authorities” in North America, Europe and Asia are investigating “a significant number“ of participants in the foreign exchange, or FX, market.
Those under scrutiny include BofA, the bank said, “regarding conduct and practices in certain FX markets over multiple years.” It said it’s cooperating with “these investigations and inquiries.”
BofA also said it’s cooperating with an investigation by the civil division of the U.S. attorney’s office in
Brooklyn, N.Y., into yet more mortgage issues.
(The bank has run up more than $50 billion in mortgage-related costs since acquiring
Countrywide Financial Corp., the famously aggressive Calabasas home lender, in 2008.)
The issue this time is “compliance with the requirements of the Federal Housing Administration’s Direct Endorsement Program,” which entitles lenders to underwrite FHA loans themselves on behalf of the federal loan insurer.
The bank said the Brooklyn probe is part of an industrywide effort by regulators and government agencies to pursue claims under the Financial Institutions Reform, Recovery and Enforcement Act of 1989, known as FIRREA, and the False Claims Act.
“FIRREA contemplates civil monetary penalties as high as $1.1 million per violation or, if permitted by the court, based on pecuniary gain derived or pecuniary loss suffered as a result of the violation. Treble damages are potentially available for FCA claims,” the bank said.
It said the recent surge of regulation and the “compliance burdens” imposed by it “has resulted in operational and compliance costs and may limit our ability to continue providing certain products and services.”