Bank of America is currently negotiating to pay at least $12bn in order to settle several federal and state civil probes into its role in the 2008 financial crisis.

Bank executives, as well as officials from the Justice Department, have been actively meeting to discuss the fine with negotiations still in an ‘early’ phase, according to a report by the Wall Street Journal.

[R]eports say that Bank of America is likely to accept the $12bn fine, despite the fine seriously injuring the finances of the bank

The massive pay-out, combined with the $6bn BofA has already agreed to pay the Federal Housing Finance Agency for its handling of toxic mortgages, would exceed the record $13bn JPMorgan Chase paid last year to resolve similar charges.

The deal could be setting a precedent for the Justice Department to press other financial firms for huge fines, as compensation for the costs of the crisis and ensuing economic recession. BofA is one of several major banks currently looking to settle federal and civic probes and investigations, as regulators are pushing for harder and tougher punishments. Only last week, WSJ reported that French banking giant BNP Paribas is currently looking at potential criminal charges, which could send future fines through the roof and see the bank banned from doing business on Wall Street. In this respect, many firms are hoping to avoid such consequences by settling before criminal investigations into banks take precedent.

According to WSJ, a minimum $5bn of Bank of America’s fine will be used to help homeowners reduce the amounts they owe on their mortgages or assisting struggling neighbourhoods that were hit hard by the housing downturn. In this respect, Bank of America, JPMorgan and several other major firms are accused of selling sub-standard home loans to unqualified consumers, packaging those mortgages into securities and selling them to investors around the world.

Consequently, banks have spent tens of billions in legal fees to fend off federal and state probes, whereas no senior executives have faced the possibility of jail time. In order to avoid that, reports say that Bank of America is likely to accept the $12bn fine, despite the fine seriously injuring the finances of the bank, which earned about $11bn last year.