A New York appeals court approved in full Bank of America's $8.5 billion settlement with investors over the packaging and selling of faulty residential mortgage-backed securities by its Countrywide unit in the run-up to the financial crisis, according to media reports. The settlement was originally reached in 2011. Thursday's ruling by the appeals court reversed a decision made by a New York state supreme court judge in January 2014 that Bank of America did not have to repurchase the faulty loans because the trustee, Bank of New York-Mellon, did not evaluate them properly.
The judge wrote in Thursday's ruling that the settlement was legal and that BNY-Mellon showed "no indication that it was acting in self-interest or in the interests of Bank of America rather than that of the certificate holders." Bank of America's acquisition of Countrywide in 2008 has since cost the megabank billions of dollars in settlements and legal expenses, including a record $16.65 billion settlement with the Department of Justice in August 2014.
U.S. Representative Randy Neugebauer introduced a bill Thursday intended to replace the director of the Consumer Financial Protection Bureau with a five-member commission. He announced his plan to support legislation in his testimony at a House Financial Services Committee hearing earlier this week. Neugebauer’s proposal would replace the CFPB director with a bipartisan, five-member commission appointed by the president for five-year terms, with no more than three from a single political party.