Regions Financial Corp's
The audit committee of the Birmingham, Alabama-based bank is said to have begun the probe after the Federal Reserve expressed concerns about past practices at the bank, the paper said.
Investigators are looking at so-called extend-and-pretend cases, where a bank gives a borrower more time and delays reclassifying a souring loan, the paper reported.
The Journal also said that the investigation will look into 'troubled-debt restructurings,' where a bank breaks up a nonperforming loan and labels a portion of it as performing.
Regions Financial did not immediately respond to a request from Reuters seeking comment.
The Journal also reported that the SEC probe on Morgan Keegan & Co, the investment-bank unit of Regions, on whether it defrauded investors in subprime securities could likely result in a settlement.
In April 2010, U.S. regulators charged Morgan Keegan and two employees with fraud for inflating the value of subprime mortgages and other risky debt in mutual funds, resulting in more than $1 billion of investor losses.
(Reporting by Vaishnavi Bala in Bangalore; Editing by Muralikumar Anantharaman)