ALEXANDRIA, Va. (10/20/15)--The National Credit Union Administration reached settlement agreements Monday 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 Monday’s agreements, total recoveries from litigation involving banks that sold the faulty securities reached $2.2 billion.
“NCUA’s litigation efforts are helping minimize the costs of the corporate crisis to the credit union system, and those efforts will continue,” NCUA Chair Debbie Matz said. “The agency has a statutory obligation to protect credit unions from those costs, and we will pursue the available legal remedies in order to hold the institutions that sold the faulty securities accountable for their actions.”
The Barclay’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.
NCUA also has pending suits against financial firms alleging their failure to perform their duties as trustees of residential mortgage-backed securities trusts.