Date
28 May 2017
RBS has settled some US lawsuits related to mortgage-backed securities without admitting guilt. Photo: Reuters
RBS has settled some US lawsuits related to mortgage-backed securities without admitting guilt. Photo: Reuters

RBS in US$1.1 bln settlement over some US mortgage cases

Royal Bank of Scotland Group (RBS) has reached a US$1.1 billion deal with the US National Credit Union Administration (NCUA) to resolve civil lawsuits related to the sale of toxic mortgage-backed securities.

The settlement resolves lawsuits filed in federal courts in California and Kansas in the NCUA’s role as the liquidating agent for Western Corporate Federal Credit Union and US Central Federal Credit Union, Reuters reports.

Under the settlement, RBS does not admit fault, the NCUA was quoted as saying in a statement.

The settlement comes on top of a prior deal in 2015 in which RBS agreed to pay US$129.6 million to resolve a similar federal lawsuit the NCUA filed in New York.

RBS said in January that it had set aside 3.8 billion pounds (US$4.95 billion) to resolve civil lawsuits over mortgage-backed securities that were packaged and sold before the US housing meltdown and financial crisis in 2008.

The provision did not cover ongoing investigations by the US Justice Department or various state attorneys general.

RBS continues to face a multi-billion dollar lawsuit by the US Federal Housing Finance Agency, which has acted as the conservator for mortgage giants Fannie Mae and Freddie Mac since their government takeover in 2008.

The NCUA said it continues to litigate against other banks, including Credit Suisse and UBS, over what it says was their sale of faulty mortgage-backed securities to corporate credit unions.

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CG/RC

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