Deutsche Bank agrees to pay $7.2 billion to settle mortgage-abuse case
The deal with the Justice Department could dampen conflict worries for Donald Trump, whose businesses have borrowed more than $300 million from the German bank.
By Drew Harwell and Tom Hamburger December 22 at 11:43 PM
German financial giant Deutsche Bank said it will pay $7.2 billion to settle a landmark mortgage-abuse case with the Department of Justice.
If approved, the proposed settlement could help dampen concern about a conflict facing incoming President-elect Donald Trump, whose businesses have borrowed more than $300 million from the troubled German bank.
The settlement, which the bank announced late Thursday, follows a months-long Justice Department investigation into Deutsche mortgage-securities abuses at the dawn of the financial crisis. The bank will pay roughly half what the department had suggested for a penalty earlier this year.
The settlement was reached “in principle” and could still stand to change in its final documentation, the bank said. The Justice Department declined to comment.
Deutsche has in recent months come under scrutiny for the potential influence it could exert on Trump, who in financial filings has counted the European megabank as his companies’ biggest lender, with roughly $364 million in outstanding debts.
But the settlement will likely not close the book on worries over the president-elect’s close ties to the bank, which has faced a series of investigations over suspicious trading activity and market manipulation, including in Russia and around the world.
Deutsche will pay a $3.1 billion penalty and agree to an additional $4.1 billion in loan modifications and other homeowner relief over a five-year period. Justice investigators initially requested a settlement of up to $14 billion in September, triggering unease within the bank and highlighting the soon-to-be businessman-in-chief’s precarious debts.
Some members of Congress and ethics advisers have targeted Trump’s debts to the bank as one of his most critical conflicts. Trump’s private real estate fortune has for nearly two decades depended on a steady flow of Deutsche loans.
Advisers have questioned whether conflicts of interest concerning what Trump owns could color his presidential policies and dealmaking. But what he owes could prove just as influential, because those weighty debts aren’t easily shaken off, and because the Trump family’s real estate business could rely on Deutsche funds for future work.
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http://www.washingtonpost.com/business/economy/deutsche-bank-agrees-to-pay-72-billion-to-settle-mortgage-abuse-case/2016/12/22/d3eac2b4-c6ca-11e6-bf4b-2c064d32a4bf_story.html?hpid=hp_hp-more-top-stories_trumpdeutsche1130p%3Ahomepage%2Fstory&utm_term=.a8e6d29d5bf9
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