Never fear, citizens!  With this much-ballyhooed $16.65 billion settlement, our hero Eric Holder has swooped in like the proverbial mighty raptor eagle, ruler of the skies, and snatched the lowly serpent–a “BoA”–in its fearsome talons, to be sacrificed for the eagle’s nourishment.

Yeah, I wish.

According to the New York Times:

“The landmark settlement, announced by Attorney General Eric H. Holder Jr. in Washington on Thursday morning, requires Bank of America to pay a $9.65 billion cash penalty and provide about $7 billion in relief to homeowners and blighted neighborhoods.

‘The size and scope of this multibillion-dollar agreement go far beyond the ‘cost of doing business,’’Mr. Holder said in a prepared statement. ‘This outcome does not preclude any criminal charges against the bank of its employees. Nor was it inevitable over these last few weeks that this case would be resolved out of court.'”

Wow!  A record settlement!  That’s a lot of money, right?  It would be, if that’s what BoA actually has to pay.  But that’s extremely unlikely, as pointed out yesterday by the Associated Press in an article titled “Bank of America’s $17 Billion Settlement Won’t Cost It $17 Billion”:

“How much will Bank of America’s (BAC) expected $17 billion mortgage settlement cost the company? The answer is, almost certainly not that much.

In mega-settlements negotiated with the government, a dollar is rarely worth an actual dollar.

Inflated figures make sensational headlines for the Justice Department, and $17 billion would be the largest settlement by far arising from the economic meltdown in which millions of people in the United States lost their homes to foreclosure. But the true cost to companies is often obscured by potential tax deductions and opaque accounting techniques.“

So Eric Holder/Obama get to appear to be really punishing the big bad BoA constrictor, when the reality will undoubtedly be much different than what is now being loudly trumpeted.  Especially when one considers the “opaque accounting techniques” mentioned above, which is a pleasant euphemism for fraudulent accounting.

Don’t forget that it was such “opaque accounting techniques” that resulted in a little accounting “oopsie” that persisted for 5 years which made it appear that BoA had $4 billion more than it actually had, according to the New York Times back in April:

” Bank of America disclosed on Monday that it had made a significant error in the way it calculates a crucial measure of its financial health, suffering another blow to its effort to shake its troubled history.

The mistake, which had gone undetected for several years, led the bank to report recently that it had $4 billion more capital than it actually had. After Bank of America reported its error to the Federal Reserve, the regulator required the bank to suspend a share buyback and a planned increase in its quarterly dividend.”

As they might say in Nawth Cuh-lina, BoA’s base of operations: “Well, ah dee-clay-uh!”  Everyone who looked at BoA’s books just somehow missed this.  For five years–from 2009 (the year after the financial crisis of 2008, the bailout, when BoA bought Merrill Lynch and Countrywide, the time when banks should have been under the most intense scrutiny of all) until 2014, everyone “missed” this, according to the Charlotte Business Journal:

“Bank of America’s accountants shouldn’t be the only ones blushing about their recent blunder. External auditors and federal regulators for five years overlooked the mistake, too. 

[SNIP]

The mistake, a  complicated accounting process that wasn’t carried out properly, dates back to 2009 when the bank bought Merrill Lynch and has been repeated year after year. People inside the bank last week caught the error and spoke up. It was then reported to federal regulators.

While it’s certainly the bank’s fault, for five years the blunder managed to avoid being detected by internal auditors, BofA’s external auditors and regulators at the Federal Reserve.“

Just a “mistake.” Uh, yeah…

So anyway, back to how the new BoA settlement won’t be as painful as advertised:

“Whether cash payments are structured as penalties or legal settlements can determine whether targeted companies can declare them as tax-deductible business expenses. Also, consumer relief is an amorphous cost category: If Bank of America’s deal resembles the department’s previous settlements with JPMorgan (JPM) and Citigroup (C), that part could be less costly to the company than the huge figures suggest.

Some relief comes from actions that do not cost the banks anything, including making loans in depressed areas or reducing the principal of mortgages owned by outside investors.

Banks earn a multiple of each dollar spent on some types of relief. Under Citi’s deal, for example, each dollar spent on legal aid counselors is worth $2 in credits, and paper losses on some affordable housing project loans can be credited at as much as four times their actual value.“

Of course, the details of all this surely will be overseen by federal regulators as well as outside auditors.  That will create the appearance of compliance with the settlement but will be touted as actually ensuring compliance.

And do you know who BoA’s auditor is?  The entity who will ensure compliance…I mean, create the appearance of compliance…er, um…you know what I mean… It’s PricewaterhouseCoopers, who oversaw “a series of audit failures” which was detailed in a 2013 report released by the Public Company Accounting Oversight Board:

“The Public Company Accounting Oversight Board (PCAOB) says that in many of the cases, the firms [PricewaterhouseCoopers and KPMG] had failed to gather sufficient appropriate audit evidence to support their audit opinions on the financial statements and on the effectiveness of internal control over financial reporting.

According to the PCAOB’s report on PwC, the board found significant deficiencies in 21 of the 52 audits it inspected. In one listed company audit, for example, the firm was found to have insufficiently tested the valuation of two categories of financial instruments that represented a significant portion of the company’s portfolio. Nor had it performed enough tests on controls over the valuation of fixed-maturity investment securities.”

So I feel confident that an auditor and regulators that “missed” a glaring accounting error for five years and has a record like that mentioned above will be very vigilant in seeing that Bank of America diligently pays all of its required settlement money.  Don’t you?  What’s that?  You don’t?  What are you, a terrorist?

And even if by some miracle BoA is made to strictly follow the settlement and cough up $10 billion in cash, they can just get it right back through QE, which isn’t ending until October.  And maybe not even then, according to the Washington Post:

“The Federal Reserve’s trillion-dollar effort to shore up the U.S. economy is likely to come to an end in October, closing the books on a bold but controversial experiment that has tested the limits of the central bank’s power.

For the past year and a half, the Fed has been buying tens of billions of dollars in government bonds and securities each month in an attempt to tamp down long-term interest rates and boost the recovery. It was the third and largest bond-buying program the central bank has launched since the 2008 financial crisis. But officials have been slowly scaling back the effort this year, and documents released Wednesday show that the Fed’s policy-setting committee is nearly ready to call it quits.”

All of which to say–if I were you, I wouldn’t feel too bad for bad ol’ BoA…