Following an agreement reached March 24 with Credit Suisse for $29 million, the NCUA's legal recoveries in securities cases will total $2.5 billion.
The legal recoveries will be used, in part, to pay claims made against the Temporary Corporate Credit Union Stabilization Fund, in turn reducing the likelihood that assessments will be charged to federally insured credit unions to pay for losses caused by corporate credit union failures.
The regulator accepted a $29 million offer of judgment from Credit Suisse, which resolved claims resulting from losses related to purchases of residential mortgage-backed securities by corporate credit unions Members United and Southwest.
The offer of judgment included $29 million in damages plus prejudgment interest in an amount to be determined by the court, in addition to attorney's fees, which will be determined by an agreement between the parties or the court.
"The NCUA will continue to meet its statutory obligation to secure recoveries for credit unions and ensure consumers remain protected," NCUA Board Chairman Debbie Matz said. "We will continue to aggressively pursue recoveries against Wall Street firms that contributed to the corporate crisis with the goals of minimizing net losses of the corporate crisis and providing a future rebate to credit unions."
The NCUA board initiated litigation as a liquidating agent for failed corporate credit unions. Net proceeds will be used to pay claims against five failed corporate credit unions.
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