CHART: The Ridiculous Amount of Money Big Banks Spend in Settlement Costs

By Tara Clarke, Associate Editor, Money Morning • @TaraKateClarke • February 10, 2014

The amount of money big banks have spent on settlements in just the last four years will blow your mind - and these totals are about to get higher.

In December, U.S. Attorney General Eric Holder told Reuters the Justice Department plans on bringing civil mortgage fraud cases against "several financial institutions" sometime in early 2014.

Holder specifically mentioned JPMorgan Chase & Co. (NYSE: JPM). The bank agreed to a civil settlement in November under which it would pay $13 billion to end government investigations into its marketing and sale of mortgage-backed securities. The settlement did not preclude criminal investigations, which are still ongoing. Holder said the JPMorgan case is a model for how the cases will typically be handled going forward.

And on Jan. 24, 2014, Holder told MSNBC that there are no financial institutions too big to indict, nor are bank executives immune from criminal investigation and prosecution.

Any new penalties will go on top of an already staggering total of settlement costs for the "Big Six" U.S. banks - the six largest bank holding companies by Q3 2013 assets.

Together the banks paid $85.75 billion in credit and mortgage-related settlement costs from fiscal 2010 through the end of third-quarter 2013. Here's how those payments breakdown by bank*:

These massive expenses don't even include the following bank costs:

• Since 2008 the six banks have also had to repurchase ("buyback") $98.9 billion worth of bad mortgages they stuffed into collapsed mortgage-backed securities they sold to investors around the globe.
• Besides buybacks and settlement fines, there are restitution and other compensation charges paid out to meet government regulations implemented in response to the housing crisis.
• There are no credible breakdowns of what banks call "legal and litigation" expenses that breaks out the cost of their outside counsel. Presumably, those charges are well into the tens of billions of dollars.

And the bad behavior of these too-big-to-jail banks goes well beyond these credit crisis and mortgage-related settlements. They have collectively paid tens of billions more for all kinds of crimes.

For instance, just take a look at the story behind some of JPMorgan Chase's settlements in recent years. Be warned - each is more shocking (and disgusting) than the last...

Join the conversation on Twitter on #BigBank misbehavior in 2014, and be sure to follow @MoneyMorning.

* These figures were compiled by SNL Financial, and a more detailed breakdown is available on their website.