Recoveries in Securities Cases Reach More than $1.9 Billion
ALEXANDRIA, Va. (Sept. 16, 2015) – The National Credit Union Administration today announced acceptance of an offer of judgment for $129.6 million from the Royal Bank of Scotland to resolve claims arising from losses related to purchases of residential mortgage-backed securities by Members United and Southwest corporate credit unions.
“NCUA has a statutory obligation to secure recoveries for credit unions and ensure that consumers remain protected,” NCUA Board Chairman Debbie Matz said. “We can assure stakeholders that we will continue to aggressively pursue recoveries against Wall Street firms that contributed to the corporate crisis. Each recovery as well as our ongoing lawsuits further NCUA’s goal of minimizing the losses of the corporate crisis and future costs to credit unions.”
NCUA has now obtained more than $1.9 billion in legal recoveries. NCUA uses the net proceeds to reduce Temporary Corporate Credit Union Stabilization Fund assessments charged to federally insured credit unions to pay for the losses caused by the failure of five corporate credit unions.
NCUA still has litigation pending in federal courts in Kansas and California against Royal Bank of Scotland for sales of faulty residential mortgage-backed securities to U.S. Central and Wescorp. The agency also has lawsuits pending against Goldman Sachs, Wachovia, UBS, Barclays, Credit Suisse and Morgan Stanley based on the sale of faulty securities, causing the collapse of five corporate credit unions. NCUA was the first federal regulatory agency for depository institutions to recover losses from investments in these securities on behalf of failed financial institutions.