British bank Barclays PLC and USA bank Wachovia, now part of Wells Fargo & Co., will pay a combined $378-million (U.S.) to resolve claims over toxic mortgage-backed securities sold to now-failed credit unions, a US credit union regulator said on Monday.
Advertisement
US Central Federal Credit Union and the Western Corporate Federal Credit Union were crippled by huge losses when the housing market crashed and complex investments called mortgage backed securities turned sour.
Barclays will pay $325 million and Wachovia will pay $53 million, the National Credit Union Administration said.
With the $378 million from the Wachovia and Barclays settlements, NCUA has recovered $2.2 billion in several large settlements.
RBS reached a £84.4million settlement with the NCUA in September.
NCUA has sued a number of lenders, including Barclays (up 3.85p to 254.65p) and Royal Bank of Scotland, over the collapse of two credit unions in 2009 and 2010.
According to the credit union regulator, it will dismiss all pending lawsuits against Barclays in federal district courts in New York and Kansas after the completion of the settlement.
She added, “The agency has a statutory obligation to secure recoveries for credit unions and ensure that consumers remain protected, and we take that responsibility very seriously”.
Advertisement
Goldman Sachs Group Inc., UBS AG, Credit Suisse Group AG and Morgan Stanley, based on their sales of faulty securities that contributed to the failures of five corporate credit unions following the 2008 financial crisis.
