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JPMorgan's $5 billion FHFA deal tax-deductible: WSJ


The proposed $13 billion settlement between the U.S. Department of Justice and J.P. Morgan Chase & Co is at risk of collapse, the Wall Street Journal reported on Tuesday, citing sources familiar with the matter.

The Journal said fights over separate criminal charges and insurance could scuttle the deal, but that talks were ongoing as of Tuesday afternoon.

The paper had previously reported that JPMorgan wanted to recover any portion of the deal related to Washington Mutual bonds from a pool of funds for that bank's creditors at the Federal Deposit Insurance Corp.

That, the paper said, set up the prospect of the FDIC—a federal agency—effectively funding part of JPMorgan's settlement with the government.

For the full WSJ story, click here.

Separately, the paper also reported that the bank's $5.1 billion settlement with the Federal Housing Finance Agency will be entirely tax-deductible.

The deal with the regulator of Fannie Mae and Freddie Mac was struck last week. The paper said JPMorgan could end up saving $1.5 billion in taxes, based on its most recent tax rate.

JPMorgan shares fell 0.3 percent in afternoon trading. (What's the stock doing now? Click here)

Volume was very heavy, with 4.5 million shares trading hands in just 20 minutes after the WSJ report, representing more than a third of the stock's total turnover for the day.

Click here for the latest on the markets.

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