Ally reaches settlement with the FHFA, FDIC
[Update 1: A previous version of this article suggested Ally settled for $170M. However, that figure refers to what the firm added to its loss reserves]
Ally Financial Inc. (ALLY) has reached a settlement with the Federal Housing Finance Agency and the Federal Deposit Insurance Corporation to resolve outstanding mortgage issues. The bank, which used to be over lender Residential Capital, disclosed an additional $170 million contribution to its loss reserves in the third quarter.
Details of the settlement itself have yet to be released.
The settlements require pending litigation against Ally to be dismissed. Ally has been slowly diminishing its exposure to the mortgage lending space. The firm's former mortgage division, ResCap, entered into bankruptcy reorganization in the wake of the financial crisis.
"These settlements are key steps in Ally addressing its remaining legacy mortgage risks," said CEO Michael A. Carpenter. "We are pleased to be able to put these matters behind us and continue to focus on our leading automotive finance and direct banking operations."