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Bank of America, Wells Fargo and fellow mortgage servicers are more likely to dodge a threatened $20 billion in penalties for faulty foreclosures after federal agencies cut ahead of the states by signing deals without fines.
A task force of 50 state attorneys general already was arguing internally over proposed sanctions when people familiar with the talks said the Federal Reserve, Office of the Comptroller of the Currency, Office of Thrift Supervision and Federal Deposit Insurance Corp. began making the deals.
While the U.S. watchdogs may yet seek fines, the pacts ease pressure on the banks and erode states’ leverage, said Gilbert Schwartz, a former Fed attorney.
