Today, Bank of America announced it would pay $16.5 billion to end state and federal lawsuits over selling mortgage-backed securities that helped contribute to the financial crisis of 2008. Attorney General Eric Holder said, "Bank of America has acknowledged that, in the years leading up to the financial crisis that devastated our economy in 2008, it, Merrill Lynch and Countrywide sold billions of dollars of [Residential Mortgage-Backed Securities] backed by toxic loans whose quality and level of risk they knowingly misrepresented to investors and the U.S. government."

According to the Wall Street Journal, "The settlement requires the bank to pay $9.65 billion in cash to the Justice Department, six states, and other government agencies, including the Securities and Exchange Commission. The bank will also provide $7 billion worth of aid for struggling consumers, through actions such as modifying mortgages for borrowers who owe more than their homes are worth, or demolishing derelict properties."

New York State will get $800 million—$300 million in cash and a "minimum of $500 million worth of consumer relief" according to New York Attorney General Eric Schneiderman, who said, "This historic settlement builds upon our work bringing relief to families around the country and across New York who were hurt by the housing crisis, and is exactly what our working group was created to do. The frauds detailed in Bank of America’s statement of facts harmed countless of New York homeowners and investors. Today's result is a major victory in the fight to hold those who caused the financial crisis accountable."

The BoA settlement is larger than the $13 billion settlement that JP Morgan Chase agreed to; at first, BoA only wanted to pay $13 billion, but, Bloomberg News reports, "prosecutors took a more aggressive stance, seeking to dispel criticism of their efforts to punish misconduct that helped fuel the housing bubble and financial crisis. Talks intensified in late July after the bank acquiesced to demands that it raise its offer, people familiar with the matter have said."

Still, the U.S. Public Interest Research Group pointed out that "large portions of bank settlements with the government have been tax-deductible," with senior analyst Phineas Baxandall saying, "To understand how significant the BofA settlement really is, people need to ask how many billions the bank is allowed to write off as tax deductions, and how much of the announced figure includes 'fake costs' — costs the bank would have incurred anyway to protect its bottom line."