Zions Bancorp. in Salt Lake City disclosed that it had entered into a "substantive settlement discussion" with the Justice Department regarding a probe into its payment-processing practices.

The inquiry stems from a class-action lawsuit, filed in early 2010 in the U.S. District Court for the Eastern District of Pennsylvania, that alleged wrongful telemarketing practices tied to services provided by Modern Payments, a small Zions unit. A settlement was reached for about $37.5 million, depending on certain contingencies.

The Justice Department's inquiry began in 2013, the $59.5 billion-asset Zions said Monday in a regulatory filing.

Any outcome should have a "limited impact" on Zions' near-term financials because the company has likely built a legal reserve in advance, John Pancari, an analyst at Evercore ISI, wrote in a note to clients.

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