Citi to Pay $7 Bil to Settle Subprime Mortgage Investigations

CitiCitigroup Inc. said Monday it has agreed
to pay $7 billion to settle federal and state investigations into the
sale of defective mortgage investments during the subprime housing boom.

California is among several states that will share in
the settlement, one of the largest to come from probes into the role of
Wall Street banks in helping trigger the 2008 financial crisis.

Atty. Gen. Eric H. Holder and officials from Colorado and New York have scheduled a news conference for 10 a.m. EDT Monday.

Citigroup, the nation?s third-largest bank by assets,
said it would pay $4.5 billion in fines and $2.5 billion in consumer

?We believe that this settlement is in the best
interests of our shareholders, and allows us to move forward and to
focus on the future, not the past,? said Citigroup Chief Executive
Michael Corbat.

The consumer relief will come from principal
reductions and other assistance for struggling borrowers as well as
financing the bank will provide for building and preserving affordable
rental housing, Citigroup said.

Because of the settlement, Citigroup said it will
take a charge of $3.8 billion on its second quarter earnings when it
announces those Monday.

Source: MCT Information Services