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NCUA Agrees to $378M in Two RMBS Settlements
Tuesday, October 20, 2015 6:40 AM

The National Credit Union Administration reached settlement agreements yesterday totaling $378 million with Barclay’s Capital and Wachovia. The settlements come from the agency’s ongoing litigation with sellers of faulty residential mortgage-backed securities, which caused the failure of corporate credit unions.

With today’s agreements, total recoveries from litigation involving banks that sold the faulty securities reached $2.2 billion. The Barlcay’s settlement is for $325 million, and once the settlement is completed, the NCUA will dismiss pending suits against the firm in federal district courts in New York and Kansas. Barclay’s does not admit fault in the settlement. The NCUA first brought suit against Barclay’s in 2012.

The Wachovia settlement is for $53 million, and once the settlement is completed, the NCUA will dismiss pending claims against the firm in federal district courts in California, Kansas, and New York. Wachovia does not admit fault in the settlement. NCUA first filed suit against Wachovia in 2011.

According to the NCUA, it continues to pursue litigation in federal courts in New York, Kansas, and California against financial firms, including Goldman Sachs, UBS, Credit Suisse, and Morgan Stanley, based on the sale of faulty securities that caused the collapse of five corporate credit unions.

The agency has other litigation pending against securities firms alleging violations of state and federal anti-trust law by manipulation of interest rates through the London Interbank Offer Rate system; and NCUA also has pending suits against financial firms alleging their failure to perform their duties as trustees of residential mortgage-backed securities trusts.