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The National Credit Union Administration (NCUA) has reached another settlement with a major Wall Street entity regarding the failure of five corporate credit unions.
In its latest settlement, NCUA will receive $225 million from Morgan Stanley to resolve claims first brought in 2013 that five corporate credit unions collapsed as a result of their purchase of the company’s residential mortgage-backed securities (MBS). As part of the settlement, Morgan Settlement does not have to admit any fault in the credit unions’ demise and NCUA will dismiss pending suits against Morgan Stanley in federal district courts in New York and Kansas.
“NCUA continues to pursue recoveries on behalf of the corporate credit unions against the financial firms we maintain contributed to the corporates’ losses,” NCUA Board Chairwoman Debbie Matz said. “These actions fulfill our statutory obligation to act in order to minimize costs to the credit union system resulting from the crisis. They also promote accountability and ensure consumers remain protected.”
NCUA is still pursing litigation in federal courts in New York, Kansas and California against other financial firms, including RBS, Goldman Sachs, UBS and Credit Suisse, for their role in selling problematic securities to the now-defunct credit unions.