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NCUA will receive $69.8 million from UBS to resolve claims arising from losses related to purchases of residential mortgage-backed securities by Members United and Southwest corporate credit unions. It is the third recovery announced in two weeks and pushes the total recovered to date above $3.1 billion.

NCUA's recoveries in its suits over MBS will offset the total costs to credit unions of the corporate stabilization program. NCUA is looking at a potential rebate to credit unions after the program concludes in 2021.

"NAFCU and our members appreciate NCUA's tenacity in pursuing recoveries on the sale of faulty securities that led to the downfall of five corporate credit unions," said NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt. "NAFCU will continue to urge the agency to pursue its aggressive legal recovery efforts and to be transparent in how and when the funds recovered will be refunded to credit unions."

The NCUA Board initiated litigation as liquidating agent for the failed corporate credit unions. With the addition of prejudgment interest determined by the court, the amount to be paid by UBS to NCUA increased to $69.8 million. UBS will also be liable for attorneys' fees and expenses in an amount to be determined by the court.

Including this settlement, NCUA has recovered more than $3.1 billion in legal recoveries in litigation related to the sale of faulty securities sold to corporate credit unions. Net proceeds are used to pay claims against five failed corporate credit unions, including those of the Temporary Corporate Credit Union Stabilization Fund, and are expected to provide some offset to the assessments credit unions have paid for stabilization.

Litigation by NCUA is still pending against UBS in federal court in Kansas for sales of residential mortgage-backed securities sold to U.S. Central and WesCorp corporate credit unions. Several other related lawsuits are also still pending.