Bank of America Settles With NCUA, Bringing Total Securities Suit Gains To $335M
04/02/2013 10:40 am
Bank of America has agreed to pay $165 million to the National Credit Union Administration to settle an outstanding NCUA securities lawsuit. This settlement will bring the total amount of funds recovered from agency securities lawsuits to more than $335 million, according to the NCUA.
Bank of America is one of several Wall Street Firms the NCUA has pursued legal action against. Bank of America, J.P. Morgan Securities, RBS Securities, Goldman Sachs and Wachovia are among the firms the agency alleges violated federal and state securities laws when they sold billions in residential mortgage-backed securities that later failed to now-defunct corporate credit unions.
Bank of America did not admit fault under the terms of the settlement.
"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," NCUA Board Chairman Debbie Matz said in a release. "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," she added.
Funds recovered through these legal actions will be used to help reduce the amount of future corporate stabilization assessments on credit unions, according to the NCUA.
The agency has settled with Citigroup, Deutsche Bank Securities, and HSBC, avoiding the cost of litigation and bringing in more than $170 million in funds that were lost due to the corporate credit union investments.
Matz said the NCUA has "a statutory obligation to secure recoveries for credit unions and ensure that consumers remain protected. The NCUA "will continue to expend every possible effort to fulfill that important responsibility," she added.