State attorneys general and federal agencies found an offer of $5 billion from five banks “woefully inadequate,” according to a person familiar with the talks.
Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial made that offer two weeks ago. The amount was a far cry from the $20 billion the states and federal agencies had been discussing, although not formally proposing.
“There was a noticeable chill that went across the room” when the banks presented the offer, the person said. State and federal officials plan to describe to banks on Tuesday the scope of claims they believe could be brought against the lenders, to show why they believe $5 billion is inadequate.
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