Last week’s $8.5 billion settlement agreement between Bank of America and 22 investment groups over tainted securities, is being challenged but not by BofA. Rather, one group of bondholders claim the bank got off too easy.

According to the Wall Street Journal, the investors have three main points of objection to the settlement.

First, the $8.5 billion is only a “small fraction of the potential liability that [BofA] would have faced in litigation.”

Second, that several of the institutions involved in the settlement do a significant amount of business with BofA — in one case, the bank actually owned 34% of one group — so there is a conflict of interest.

Third, that the settlement was negotiated in a “secret, non-adversarial, and conflicted way.”

Reuters reports that, on July 13, when the court is set to approve the settlement, this group of bondholders will ask to be excused from the agreement.

A lawyer for the 22 institutional investors tells Reuters that “We believe that both in its amount and in its servicing improvements, the settlement is fair to the covered trusts.”

3 Hitches in Bank of America’s Big Mortgage Settlement [WSJ]

Bondholders challenge Bank of America’s $8.5 billion mortgage pact [Chicago Tribune]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.