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Bank of America Sued by Chicago-Area Wholesale Bank

Federal Home Loan Bank of Chicago sued lenders including Bank of America Corp. claiming their failure to disclose relaxed subprime mortgage underwriting standards led it to unknowingly buy risky mortgage-backed securities.

The lawsuit was filed in a Illinois state court in Chicago by the congressionally chartered wholesale bank, which describes itself on its website as one of 12 regional U.S. institutions serving smaller retail home lenders.