![Deutsche Bank reaches $7.2 billion settlement with US DOJ regarding toxic mortgages](https://www.jurist.org/news/wp-content/uploads/sites/4/2020/03/shutterstock_657639088.jpg)
Deutsche Bank [official website] on Friday announced a $7.2 billion settlement [Reuters report] with the US Department of Justice (DOJ) [official website] regarding the sale of toxic mortgage securities that contributed to the 2008 financial crisis [Britannica backgrounder]. The terms of the agreement are not finalized but are expected to be in early January, prior to President-elect Donald Trump taking office. Under current terms [press release], the settlement would cover a $3.1 billion civil penalty as well as $4.1 billion in consumer relief “expected to be primarily in the form of loan modifications and other assistance to homeowners and borrowers … delivered over a period of at least five years.” However, Deutsche Bank stated that “there can be no assurance that the [DOJ] and the bank will agree on the final documentation.” The announcement comes within a day of the DOJ filing similar charges [Reuters report] against Barclays PLC [official website].
Several banks have faced legal challenges [JURIST backgrounder] stemming from the financial crisis of 2007-08. In September the US National Credit Union Administration (NCUA) [official website] said that the Royal Bank of Scotland Group (RBS) [official website] will pay $1.1 billion [JURIST report] after it allegedly solid toxic mortgaged-backed securities. In July 2014 Citigroup, Inc. agreed to pay $7 billion to settle a federal inquiry [JURIST report] into mortgage-backed securities sold by the bank prior to the country’s financial crisis. In November 2013 the DOJ announced that a $13 billion civil settlement [JURIST report] with JPMorgan & Co. [official website] has been finalized, resolving federal and state claims arising from the bank’s risky mortgage practices which helped lead to the 2008 financial crisis. In August 2013 the DOJ filed suit [JURIST report] against Bank of America (BOA) [official website] in the US District Court for the Western District of North Carolina [official website], claiming the corporation misled investors about securitized loans worth more than $850 million.