Editor’s note: This article was authored before Bank of America Corp (NYSE:BAC) announced adjustments to Capital Ratios. More information on that announcement can be found here.

Pressure for Bank of America Corp (NYSE:BAC) to settle its liabilities from mortgage-backed securities (MBS) sold before the financial crisis is growing, and based on what JPMorgan Chase & Co. (NYSE:JPM) had to agree to last November some people think the settlement could cross $10 billion. But crudely extrapolating from the amount of MBS each bank issued might overstate the final result.

Bank of America has already settled with some agencies

First, JPMorgan Chase & Co. (NYSE:JPM)’s $13 billion settlement included a $4 billion payment to The Federal Housing Finance Agency (FHFA), which has Bank of America Corp (NYSE:BAC) already settled for $6.3 billion, and a $1.4 billion settlement with the National Credit Union Administration (NCUA), which BAC has also settled with for $165 million, and JP Morgan had to settle with the Federal Deposit Insurance Corp (FDIC), and BAC may not have to. So the analogous figure is closer to $7 billion.

On the other hand, Bank of America Corp (NYSE:BAC) could face a much tougher negotiation with the Department of Justice and state attorney generals.

Bank of America BAC

“We don’t know if the $2.0b in civil penalties that JPMorgan Chase & Co. (NYSE:JPM) paid to the DOJ were the result of tedious calculations based on the size and egregiousness of its private label MBS program, or if it was more of a “negotiated compromise” between JPM CEO Jamie Dimon and Attorney General Eric Holder on a number that felt punitive enough to sufficiently discourage such behavior in the future,” writes Bernstein Research senior analyst John E. McDonald, who rates Bank of America Corp (NYSE:BAC) Market Perform and gives it an $18 price target in an April 25 report.

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While the exact terms of the negotiation aren’t public, McDonald believes Dimon was able to keep the total settlement down by arguing that the government brokered acquisition of Bear Stearns and Washington Mutual shouldn’t count against it, so the $2 billion FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act) settlement is on its own $115 billion MBS issuance, roughly a 1.7% fine.

BAC and the banks it acquired issued nearly $1 trillion in private label securities

Bank of America Corp (NYSE:BAC) issued $100 billion of its own private label securities, but it also acquired Merrill Lynch ($67 billion), First Franklin ($82 billion) and most importantly Countrywide, which issued another $716 billion. While Merrill Lynch was acquired after the crisis and BAC might be able to argue that it should also catch a break, it bought Countrywide well before Lehman Brothers collapsed, so the same argument doesn’t seem to hold. If the settlement is based on the total issuance, then Bank of America Corp (NYSE:BAC) could be facing fine s as high as $16 billion from the DOJ alone, but McDonald thinks that it is more likely to come in between $4 billion and $6 billion.

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State Attorney Generals are another matter. Bank of America Corp (NYSE:BAC) has already settled over Countrywide’s unfair lending practices with California for $355 million, but it might still have to settle other MBS-related activities and has other state Attorney Generals to deal with as well. McDonald estimates another $13 billion in total settlement costs, with perhaps $5 billion in ‘soft dollars’ such as debt forgiveness and loan modifications for customers, but cautions that its difficult to pin down figures so early in the process.