Mortgage securities deal with U.S. regulator

by MPA18 Sep 2015
Royal Bank of Scotland Group PLC has agreed to pay $129.6 million to resolve claims by a U.S. regulator that it sold toxic mortgage-backed securities to now-failed credit unions, according to a court filing.

National Credit Union Administration filed a federal lawsuit in New York in 2013 on behalf of two defunct credit unions, Southwest Corporate and Members United Corporate.

A spokesman for RBS did not immediately respond to a request for comment outside regular business hours.

The NCUA, which regulates, charters and supervises federal credit unions, has brought several lawsuits against various banking defendants over securities sold to several credit unions that failed during the financial crisis.

The agency previously recovered more than $1.7 billion from several banks, including JPMorgan Chase & Co, which agreed to pay $1.4 billion in November 2013; Bank of America Corp,
Deutsche Bank AG; Citigroup Inc; and HSBC Holdings Plc.

In the RBS case, the NCUA claimed the bank systematically ignored underwriting guidelines for the securities, which were rated triple-A at the time they were purchased by the credit unions for a total of more than $300 million in 2006 and 2007.

The credit unions were placed into conservatorship in September 2010, according to the lawsuit.

The case is
National Credit Union Administration Board v. RBS Securities Inc et al., U.S. District Court for the Southern District of New York, No. 13-6726.

Reuters 2015


  • by sbharkness | 9/18/2015 8:44:52 PM

    This is just a slap on the wrist for an institution their size. Ho-hum, just the cost of doing business. No worries for these Mega banks. They just take a one time write off and go one about things as if nothing had happened. Seriously, has anyone in charge been punished with jail time or any personnel fines? The answer is a resounding "NO" but if a Loan Officer makes a mistake with his or her marketing. It is a $10,000 personnel fine and a year in jail. The people that almost brought down the world economic system have not done one day in jail. In fact, NO INDIVIDUAL has even admitted to wrongdoing. These headlines are supposed to make the public think justice has been served but far from it. The hundreds of thousands of lives that were destroyed so the uber wealthy individuals could become even wealthier is sickenly wrong.


Should CFPB have more supervision over credit agencies?