FDIC Announces $190M Countrywide Legacy RMBS Settlement

Eight financial institutions have agreed to a $190 million settlement with the Federal Deposit Insurance Corporation (FDIC) to resolve claims related to the role played by their residential mortgage-backed securities (RMBS) in the failure of five banks.

The settlement concludes federal and state securities law claims that alleged misrepresentations in the offering documents for 21 Countrywide RMBS that were purchased by the five banks, which failed during 2008 and 2009. The settlement funds will be distributed among the receiverships of these defunct banks.

The eight financial institutions named in the settlement are Barclays Capital Inc., BNP Paribras Securities Corporation, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Edward D. Jones & Co., Goldman, Sachs & Co., RBS Securities Inc. and UBS Securities LLC. The banks that failed included two Texas institutions (Franklin Bank in Houston and Guaranty Bank in Austin), Colonial Bank of Montgomery, Ala., Security Savings Bank of Henderson, Nev., and Strategic Capital Bank of Champaign, Ill.