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U.S. markets recover from steep losses
CHARLOTTE, N.C., Sept. 22 (UPI) -- Bank of America said it would pay the U.S. government $425 million and extricate itself from a government guarantee of Merrill Lynch assets.
The Treasury Department arranged for the guarantee in January, after Bank of America absorbed the ailing Merrill Lynch, CNNMoney.com reported Tuesday.
That guarantee was arranged with an agreed-upon fee of 3.7 percent.
On Monday, Bank of America said it wanted "to reduce its reliance on government support and return to normal market funding."
The bank also said it severed ties with a Federal Deposit Insurance Corp. program that provided backing for the bank's own debt, The New York Times reported.
Banks have been backing away from government bailout funds to avoid the stigma of appearing weak and to dodge government stipulations on employee compensation.
The Merrill Lynch deal has also been under investigation by Congress, New York state and the Securities and Exchange Commission for allegedly misleading shareholders about Merrill Lynch's losses and an agreement to pay Merrill Lynch employees billions of dollars in bonus checks after the deal to buy the bank closed.
On Monday, the bank missed a deadline from the House Committee on Government Reform to surrender legal documents related to the Merrill Lynch purchase, the Times said.
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