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Bank of America has approved a record $16.65 billion deal with the federal government over its role in the sale of mortgage securities ahead of the financial crisis, he bank said Thursday. It's the largest settlement to come out of the financial meltdown that led to the collapse of the housing bubble and ultimately to the Great Recession. The deal will resolve allegations that the bank and companies it bought misrepresented the quality of loans they sold to investors. Most of the problem loans were sold by Merrill Lynch and Countrywide Financial before Bank of America bought them during the 2008 financial crisis. To settle the government's claims against the three companies, Bank of America will pay $9.65 billion in cash and provide consumer relief valued at $7 billion. Beyond the headline figure, however, the bank likely will not end up shelling out that much. Whether cash payments are structured as penalties or legal settlements can determine if targeted companies can declare them as tax-deductible business expenses.
-- The Associated Press, NBC News Staff and CNBC