Credit Suisse reaches final settlement with the U.S. Department of Justice
Credit Suisse announced that it has reached a final settlement with the U.S. Department of Justice (DOJ) related to its legacy Residential Mortgage-Backed Securities (RMBS) business – a business conducted through 2007.
As previously announced on December 23, 2016, the settlement releases Credit Suisse from potential civil claims by the DOJ related to its securitization, underwriting and issuance of RMBS. Under the terms of the settlement, Credit Suisse will pay to the DOJ a civil monetary penalty of USD 2.48 billion.
In addition, Credit Suisse will provide consumer relief totaling USD 2.8 billion within five years post settlement. These consumer relief measures include affordable housing payments and 1st and 2nd lien principal and interest forgiveness. The DOJ and Credit Suisse agreed to the appointment of an independent monitor to oversee the completion of the consumer relief requirements of the settlement.
Credit Suisse is pleased to have reached an amicable settlement that allows the bank to put this legacy matter behind it, while also protecting the interests of its clients, employees and other stakeholders. We remain relentlessly focused on serving our clients and continuing our progress toward our strategic goals of being a resilient, profitable and compliant organization.
Credit Suisse will take a pre-tax charge of approximately USD 2 billion in addition to its existing reserves of USD 550 million against this matter. This charge will be taken in its 4Q 2016 financial results, which will be announced on February 14, 2017.