The National Credit Union Administration (NCUA) has announced a settlement with Bank of America and certain of its subsidiaries for $165 million for losses related to purchases of residential mortgage-backed securities by failed corporate credit unions. “As a result of the Bank of America settlement, NCUA has now successfully recovered more than a third of a billion dollars on behalf of credit unions,” said NCUA Board Chairman Debbie Matz. “These settlements and our ongoing lawsuits further NCUA’s goal of minimizing the losses of the corporate crisis and cutting future costs to credit unions.”
In all, NCUA has obtained more than $335 million in legal settlements. NCUA was the first federal regulatory agency for depository institutions to recover losses from investments in these securities on behalf of failed financial institutions. NCUA uses the net proceeds to reduce Temporary Corporate Credit Union Stabilization Fund (Stabilization Fund) assessments charged to federally insured credit unions to pay for the losses caused by the failure of five corporate credit unions.
This announced settlement with Bank of America follows three similar agreements with Citigroup, Deutsche Bank Securities and HSBC totaling $170.75 million. Bank of America did not admit fault as part of the settlement.
“We have a statutory obligation to secure recoveries for credit unions and ensure that consumers remain protected,” said Chairman Matz. “We will continue to expend every possible effort to fulfill that important responsibility.”