In its $16.65 billion settlement announced Thursday, Bank of America is making $9.65 billion in cash payments to various federal agencies and six states, plus providing $7 billion in consumer relief.
The bank said the settlement will reduce its third-quarter pretax earnings by $5.3 billion, or approximately 43 cents per share after tax. The bank has also set aside money for the settlement in previous quarters.
Of the $9.65 billion cash payment, $5.02 billion in civil penalties is not tax deductible, but the rest can be used to lower Bank of America’s tax bill.
Analysts have said the consumer relief portion of the settlement is largely covered by reserves the bank has already set aside and by earlier writedowns, in which the bank writes off loans that it doesn’t expect to collect.
Here is a breakdown of the payouts. The numbers don’t add up exactly because of rounding.
Bank of America will provide $7 billion in consumer relief to thousands of consumers in 50 states.
The relief will include loan modifications that reduce loan balances, new loans to creditworthy borrowers, donations to communities struggling to recover from the financial crisis and financing for affordable housing. Staff writer Deon Roberts contributed.