Another megabank agreed to pay another megafine for reckless acts that helped fuel the economic crash of 2008.
This time, Citigroup was the bank and $7 billion was the payment, including a $4 billion fine to be paid to Uncle Sam.
The U.S. Justice Department, which struck the deal Monday, is exacting a pound of flesh on behalf of people who were hardest hit, requiring Citigroup to spend $180 million to finance affordable housing and $2.5 million for mortgage modifications.
The California Public Employees' Retirement System and the California State Teachers' Retirement System will receive $102.7 million to offset investment losses. California will get another $90 million in consumer relief, the most of any state, which is appropriate given the damage done during the crash to California's economy.
In a story with a familiar ring, no criminal charges were announced, although Attorney General Eric Holder did not rule them out at some point.
The Citigroup settlement follows JPMorgan Chase's $13 billion settlement of mortgage-related claims last November, and raised the question of whether Bank of America will be next.
There are certain twists. The Justice Department's suit covers acts that occurred from 2006 to 2009 when President Barack Obama's Treasury secretary, Jack Lew, helped oversee mortgage investments, The Wall Street Journal noted. Not surprisingly, the settlement made no mention of Lew.
A more troubling issue is whether we've learned much of anything from the financial crisis that was triggered by inflated housing prices and toxic loans packaged into investments.
Several banks have re-entered the subprime market, The New York Times reported last month.
Lenders are demanding heftier down payments and are charging more interest. And there are more regulations on the loans.
But once again, borrowers are qualifying for loans despite mediocre credit ratings and recent foreclosure, suggesting that the subprime market is beginning a comeback.
The $7 billion settlement took a toll on Citigroup. Its income dipped to $181 million in the second quarter of 2014, down from $4.2 billion for the second quarter last year.
By the close of trading Wednesday, however, Citigroup's stock price was rebounding nicely, edging toward $50 — up from $47 before the settlement was announced.
Not much seems to have changed.