ALEXANDRIA, Va. (1/19/16)--The National Credit Union Administration (NCUA) will be included in the $5 billion settlement reached between Goldman Sachs and the U.S. Financial Fraud Enforcement Task Force’s Residential Mortgage-backed Securities (RMBS) Working Group, an agency spokesperson told News Now Friday.
The NCUA is unable to comment further with any details, but will release more information once the settlement is finalized.
“We’re glad NCUA is included in this settlement and look forward to learning more details,” said Bill Hampel, CUNA’s chief policy officer.
Goldman Sachs announced an agreement in principle last week to resolve actual and potential civil claims by the NCUA (acting as conservator for several failed corporate credit unions), along with the U.S. Department of Justice, attorneys general from New York and Illinois and the Federal Home Loan Banks of Chicago and Seattle.
The claims are related to Goldman Sachs’ securitization, underwriting and sale of residential mortgage-backed securities from 2005 to 2007.
Under the terms of the settlement agreed to in principle, Goldman Sachs will pay a $2.385 billion civil monetary penalty, make $875 million in cash payments and provide $1.8 billion in consumer relief.
Last year proved to be a fruitful one in terms of the NCUA settling RMBS cases. The agency settled in December with Morgan Stanley for $225 million, with Barclay’s Capital and Wachovia for a total of $378 million in October and with the Royal Bank of Scotland in September for $127 million.
The total amount recovered by the NCUA, not including any Goldman Sachs funds, is more than $2.45 billion. Net proceeds from settlements are used to pay claims against failed corporate credit unions, including those of the Temporary Corporate Credit Union Stabilization Fund.
Stabilization Fund recoveries reduce borrowings from the U.S. Treasury and eliminate the need for assessments to federally insured credit unions, according to the NCUA.