Ally Financial Inc. has reached settlements with the Federal Housing Finance Agency (FHFA) and the Federal Deposit Insurance Corporation (FDIC) for all pending litigation and related claims. The settlements require pending litigation against Ally to be dismissed, and the FHFA and the FDIC released claims will no longer be exceptions to the third-party releases related to the Residential Capital LLC (ResCap) settlement. Ally expects to record a charge of $170 million in the third quarter in connection with the FHFA and the FDIC settlements.
"These settlements are key steps in Ally addressing its remaining legacy mortgage risks," said Chief Executive Officer 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."
As part of the settlement with the FHFA, the ResCap Chapter 11 Plan will be amended to add Freddie Mac, and the FHFA, as conservator for Freddie Mac and Fannie Mae, as exceptions to the third party releases only with respect to certain ordinary-course claims against Ally Bank, as a former mortgage seller and servicer.