Bank of America Corp. on Monday agreed to pay $425 million to shelve a loss-sharing pact designed to help it digest the securities firm Merrill Lynch & Co.
Bank of America also proposed to the Treasury Department that it be allowed to repay $20 billion of its $45 billion in taxpayer-funded assistance, which would remove Bank of America from the list of banks with "exceptional" assistance.
The pact, announced in January, was to cover $118 billion in assets, with about 75% of the total from Merrill and 25% from Bank of America.
But the bank and government never signed a final contract amid disagreement about what it could cover, and Bank of America said in May that it wanted out.
The government asked the Charlotte bank to pay an exit fee, but Bank of America balked, saying its positions had never actually been covered. Regulators argued the bank benefited from the implied protection.
Also Monday, B of A said its chief strategy and marketing officer, Anne Finucane, will meet with Rep. Edolphus Towns, D-N.Y., today to discuss a congressional probe of the Merrill acquisition.
B of A missed a noon Monday deadline to submit documents and other evidence requested by Congress.
Towns, who is chairman of the House Committee on Oversight and Government Reform, was weighing whether to issue a subpoena to force the bank to turn over the information.
Separately, the Securities and Exchange Commission issued a statement Monday vowing to pursue its case against B of A.
"We will vigorously pursue our charges against Bank of America and take steps to prove our case in court," the SEC said.
"We will use the additional discovery available in the litigation to further pursue the facts and determine whether to seek the court's permission to bring additional charges in this case."
