NEW YORK–NCUA has reached another settlement in its long-running litigation with banks and other firms that sold mortgage-backed securities to corporate credit unions.
The sharp decline in the value of those securities as part of the housing crash led to steep losses for many corporate CUs and the credit union insurance fund, and eventually led the eventual conservatorship of five of the corporates by the federal regulator.
In the latest settlement, the agency has reached an agreement with HSBC Bank USA, according to documents filed by the United States District Court for the Southern District of New York.
“The court has been informed that the parties have reached a settlement in principle in this case,” said Judge Lorna G. Schofield.
NCUA confirmed with CUToday.info that the settlement has been reached, but it declined to provide a figure related to the settlement.
The suit was originally filed by NCUA in 2015.
As CUToday.info reported in-depth here, NCUA has recovered more than $4 billion from the various banks that sold the securities to corporate credit unions as the result of litigation.