Swiss banking major Credit Suisse has reached a final settlement with the US Department of Justice (DOJ) over the sale of legacy residential mortgage-backed securities (RMBS).

The regulator alleged that investors suffered billions of dollars in losses from investing in RMBS issued and underwritten by Credit Suisse between 2005 and 2007, and termed it as a factor contributing to the 2008 financial meltdown.

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Under the arrangement with DOJ, Credit Suisse will pay a civil monetary penalty of $2.48bn to the DOJ.

Moreover, the bank will also offer $2.8bn in consumer relief over five years after the settlement in the form of loan forgiveness and affordable housing financing. 

Attorney general Loretta Lynch said: “Today’s settlement underscores that the Department of Justice will hold accountable the institutions responsible for the financial crisis of 2008. Credit Suisse made false and irresponsible representations about residential mortgage-backed securities, which resulted in the loss of billions of dollars of wealth and took a painful toll on the lives of ordinary Americans.”

Credit Suisse said it will book a pre-tax charge of about $2bn in its fourth quarter results for the settlement on top of its existing reserves of $550m.

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“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 said in a statement.