UBS to settle outstanding Credit Suisse RMBS case with $300M payment

A 2017 settlement between the US Department of Justice and Credit Suisse relating to residential mortgage-backed securities is finally nearing conclusion.

UBS, which acquired Credit Suisse in 2023, said Monday (Aug.4) that it has agreed to pay $300 million to bring the legacy matter to an end. The agreement was made with the DoJ on August 1 and will resolve all of Credit Suisse’s outstanding Consumer Relief Obligations under the 2017 settlement.

The issue relates to the $5.28 billion settlement that Credit Suisse AG reached with the DoJ in 2017 to resolve allegations related to its conduct in the packaging, securitization, and sale of RMBS between 2005 and 2007, before the global financial crisis.

The DoJ alleged that Credit Suisse knowingly purchased and securitized poor-quality loans, contributing to the 2008 financial crisis and that the bank misled investors about the risks associated with the RMBS it was selling.

This case was part of a broader crackdown by US authorities on financial institutions that played roles in the lead-up to the 2008 financial crisis. Other large banks also entered into multi-billion-dollar settlements with the DOJ related to RMBS misconduct including UBS which settled with the DoJ in 2023 for $1.48 billion.

The Credit Suisse settlement eight years ago, in which the bank did not admit wrongdoing, included a $2.48 billion civic penalty and $2.8 billion in consumer relief to be provided over a period of five years. However, the consumer relief was not fully paid and remained a contingent liability on the Swiss bank’s books when it was acquired by UBS.

In a statement Monday, UBS said:

“With this agreement, UBS has resolved another of Credit Suisse's legacy issues, in line with its intention to resolve legacy matters at pace in a fair and balanced way and in the best interest of all its stakeholders. In the third quarter of 2025, UBS expects to recognize a credit in Non-core and Legacy from the release of the contingent liability established with the acquisition of Credit Suisse as part of the purchase price allocation process.”