Bank of America unit Merrill agreed to settle claims tied to low interest rates on retirement account cash sweeps for US$39 million. The settlement centers on allegations that Merrill paid interest below prevailing market levels on idle cash held in certain retirement accounts, closing a legal challenge over how the brokerage handled client cash management within its retirement platform. The reported US$39 million figure is small next to Bank of America's US$377.6b size, so the direct cost looks limited, though the bigger financial angle is any change in how Merrill prices cash sweeps in retirement accounts, since even small rate adjustments on large cash balances can influence fee and interest income over time. The case fits a broader pattern of client cash scrutiny and adds to litigation costs that the bank's narrative flags as a risk capable of lifting noninterest expenses and weighing on earnings. Investors will watch whether future disclosures show higher interest rates or different terms on Merrill retirement cash sweeps, and whether regulators open further reviews of client cash practices, with any sustained rise in related legal or remediation costs across upcoming quarterly reports pointing to a broader financial drag rather than a one-off event.
Bank of America CorpMerrill agreed to a $39 million settlement over low interest rates on retirement cash sweeps, adding litigation costs that could lift noninterest expenses and weigh on earnings.
