The National Credit Union Administration, on behalf of U.S. Central Federal Credit Union and Western Corporate Federal Credit Union, announced it recovered $445 million from UBS over claims that stem from losses related to purchases of residential mortgage-backed securities by those corporate credit unions.
This settlement covers claims asserted in 2012 by the NCUA Board as liquidating agent for U.S. Central Federal Credit Union and Western Corporate Federal Credit Union in federal district court in Kansas.
As a result of the settlement, NCUA said it would dismiss its pending suit against UBS, which does not admit fault as part of the agreement.
The suit is simply the latest in a string of announcements from NCUA as it continues to recover losses from mortgage securities.
“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.”
Back in April 2016, NCUA announced it reached a separate $69.8 million settlement with UBS for claims arising from losses to Members United Corporate Federal Credit Union and Southwest Corporate Federal Credit Union.
In October 2015, Barclays and Wachovia, now a part of Wells Fargo, said they would pay a total of $378 million to NCUA as part of two separate settlements stemming from losses related to purchases of residential mortgage-backed securities.
And this won’t be the last announcement of this kind from NCUA. The administration still has pending litigation against various residential mortgage-backed securities trustees related to corporate credit union losses.
So far, NCUA’s recoveries from financial institutions the agency alleged sold faulty securities to five corporate credit unions, leading to their collapse, have reached nearly $4.8 billion.
The net proceeds from recoveries are used to pay claims against the five failed corporate credit unions, including those of the Temporary Corporate Credit Union Stabilization Fund, NCUA added.