Big banks say their legal costs are tumbling

Finance


The nation’s largest banks — and public companies, for that matter — are preparing for a timeout from the courtroom following years of being pummeled by shareholder and investor lawsuits in the wake of the Great Recession.

At the end of 2017, the country’s largest banks collectively decreased their estimates for future legal costs to their lowest levels since 2012, and legal experts predict the move is a harbinger of what’s to come for Corporate America in an era of strong job growth and loosening regulations at the federal level.

Between 2012 and the end of 2017, the nation’s 10 biggest banks by assets saw a 56 percent decline in their anticipated litigation expenses beyond their required cash reserves, according to financial statements filed with the U.S. Securities and Exchange Commission. The estimates signify the amounts banks expect to pay in litigation and legal costs beyond what they are required to set aside as emergency legal funds. The estimates are published each quarter with the SEC.

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Leading the way was Regions Financial Corp., which saw a 100 percent reduction in its anticipated legal costs in excess of reserves over the past five years, indicating the bank isn’t expecting any major settlements in the coming months. Regions did not respond to requests for comment on its legal position.

Likewise, Citigroup reduced its estimate by 80 percent while both JPMorgan Chase & Co. and PNC Financial Services Group both lowered their estimates by more than 70 percent.



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