The NCUA has received $445 million from UBS to settle claims in connection with the sale of faulty residential mortgage-backed securities to two corporate credit unions, according to the agency.
“This latest recovery, together with prior recoveries, has helped shield credit unions from greater Stabilization Fund assessments and provided a measure of accountability for the firms that sold faulty securities to the corporate credit unions,” NCUA Acting Board Chairman J. Mark McWatters said. “It remains incumbent on NCUA to provide transparency in terms of the settlements, the legal fees and other costs that go with them, and how these affect the Stabilization Fund.”
The settlement covers claims the NCUA board made in 2011 as the liquidation agent for the Western Corporate Federal Credit Union and U.S. Central Federal Credit Union.
The NCUA in April 2016 recovered $79.3 million from UBS for losses from two other corporate credit unions, Members United and Southwest.
The agency’s recoveries from financial institutions that allegedly sold faulty securities to five corporate credit unions have reached $4.8 billion. The proceeds from the recoveries are used to pay claims against the five failed corporate credit unions, including those of the Temporary Corporate Credit Union Stabilization Fund.
The NCUA will now dismiss its pending suit against UBS, which did not admit fault as part of the settlement.
NCUA still has pending litigation against various mortgage-backed securities trustees and LIBOR banks.
