BofA Said Nearing Up to $17 Billion Mortgage Settlement with DOJ. The article says that Citigroup Inc. paid $7 billion for a settlement in July and that JPMorgan Chase & Co. paid $13 billion for a settlement in November. There has been other settlements too but when financial institutions fork over the cash, who gets it?
Civil settlements with the DOJ are paid into the general fund of the US Treasury. The litigation arising from the financial crisis also involves some state governments who will get a gut of the settlement money as well.
Some of the settlements (I don’t know about the BofA one) require the institution in question to spend some portion of the money on fixing problems or setting up compliance programs.
friedo
When you say civil settlements, would those be class action lawsuits against the financial institutions in question? If not, what kind of litigation?
I am talking about the civil settlements with the DOJ; i.e., those arising out of the Department of Justice suing the banks.
Class action suits against the financial institutions (there are several, some ongoing) are private affairs between the class members and the companies. Whatever settlements or damages are awarded in those cases will be paid to the class members according to the directions of the court.