Bank of America announced it has reached a comprehensive settlement with the U.S. Department of Justice, certain federal agencies and six states. The settlement includes releases on the securitization, origination, sale and other specified conduct relating to residential mortgage-backed securities (RMBS) and collateralized debt obligations (CDOs), and an origination release on residential mortgage loans sold to Government Sponsored Enterprises (GSEs) and private-label (PLS) RMBS trusts, or guaranteed by the Federal Housing Authority (FHA).

The claims relate primarily to conduct that occurred at Countrywide and Merrill Lynch prior to Bank of America’s acquisition of those entities. Bank of America will pay a total of $9.65 billion in cash and provide approximately $7.0 billion worth of consumer relief. The cash portion consists of a $5.02 billion civil monetary penalty and $4.63 billion in compensatory remediation payments.

The bank said the settlement is expected to reduce third-quarter 2014 pretax earnings by $5.3 billion, or approximately $0.43 per share after tax. The EPS impact reflects the varying tax treatment of the components of the settlement.

“We believe this settlement, which resolves significant remaining mortgage-related exposures, is in the best interests of our shareholders, and allows us to continue to focus on the future,” said chief executive officer Brian Moynihan.

To view the full Bank of America news release, click here.

To view a related Justice Department news release, click here.