June 20, 2014

FHFA reaches $99.5M settlement with RBS

June 23, 2014 – The Federal Housing Finance Agency last week announced a $99.5 million settlement with RBS Securities Inc. over claims of federal and state securities law violations in connection with residential mortgage-backed securities.

The securities were purchased by Freddie Mac from 2005 to 2007. Freddie Mac and Fannie Mae have been under FHFA conservatorship since 2008.

FHFA has filed 18 lawsuits over faulty MBS and has reached settlements in 15, including last week's settlement with RBS. The settlement with RBS is related to a suit filed three years ago against Ally Financial, reports said.

NCUA also has a suit pending against RBS over securities sold to Western Corporate FCU. WesCorp and four other corporates were closed due to losses incurred from faulty MBS.

So far, NCUA has reported recoveries totaling more than $1.75 billion in its efforts to recover losses from corporate credit union failures. Corporate system losses have been managed through the Temporary Corporate Credit Union Stabilization Fund, and natural person credit unions have paid $8.8 billion in stabilization costs.

No stabilization assessment is planned this year. NAFCU is urging there be no assessments in the future and that credit unions receive a refund of some of the costs when the stabilization funds expires in 2021.