The settlement, announced in August, has hit a roadblock due to a dispute between the SEC's commissioners over waiving a set of additional sanctions that will come to effect when the settlement is entered in court, the report said. (http://bloom.bg/12QFcRm)

The disagreement is over the waiver that will allow the bank to seek investors for private firms, Bloomberg reported.

Two Democratic SEC commissioners are unwilling to grant Bank of America's request for a waiver, and with two Republicans supporting relief measures, the SEC is in a deadlock as its Chair Mary Jo White, the swing vote, refrains from participating due to a conflict, Bloomberg reported.

Bank of America and the SEC were not immediately available for comment.

The three main penalties that can be imposed on any lender can affect its ability to manage mutual funds, raise capital for private companies, and remove its privilege to issue its own shares or bonds without SEC approval, Bloomberg reported.

The settlement announced by the U.S. Department of Justice requires for the second-largest U.S. bank by assets to pay $9.65 billion in cash to resolve more than a dozen federal and state investigations, and provide $7 billion in help to struggling homeowners and communities.

(Reporting by Amrutha Gayathri in Bangalore; Editing by Savio D'Souza)