Pressure rises on holdout banks as Wells settles with FHFA

|About: Wells Fargo & Co. (WFC)|By:, SA News Editor

The price tag - obscured by a confidentiality agreement - is believed to less than $1B, reports the FT (a far cry from JPM's $5.1B settlement). Wells (WFC -0.4%) was the only large U.S. bank to not be named when the FHFA filed suit against 17 lenders in 2011 - apparently because it had already entered into settlement discussions with the GSE regulator.

In addition to the Bank of Dimon's settlement last week, Ally Financial reports it expects to soon reach a deal, and HSBC boosted reserves - a sign a settlement is nearing.

This ramps up the pressure on holdouts like Bank of America (BAC -0.9%), RBS, Deutsche Bank (DB -0.7%), and Credit Suisse (CS -0.4%) - all of which have large exposure to FHFA cases - to cut their own deals. Extrapolating the JPMorgan settlement leads to a range of payments of $1.7B to $7B for these four lenders, says the FT, which has reported the FHFA is pressing BofA for more than $6B.