The NCUA announced Thursday that it will receive $50.3 million in damages and interest from Credit Suisse.
Settling on claims arising from Members United and Southwest corporate credit union losses, the NCUA's collection amount will be higher than the $29 million it accepted in the judgment in March. In addition to the prejudgment interest settlement determined by the court, Credit Suisse will be liable for the attorney's fees, which are yet to be determined.
The claims stemmed from the corporate credit unions' purchases of residential mortgage-backed securities from Credit Suisse.
"[The] NCUA's litigation efforts fulfill its statutory obligation to secure recoveries for credit unions and help protect consumers," NCUA Board Chairman Debbie Matz said. "These efforts will continue. We will aggressively pursue recoveries against the Wall Street firms that contributed to the corporate crisis and work to minimize net losses and provide a future rebate to credit unions."
Following a settlement with Goldman Sachs on April 11, the agency obtained a total of more than $3 billion in legal recoveries in litigation related to the sale of faulty securities to corporate credit unions. Net proceeds from these recoveries will be used to pay claims against the failed corporate credit unions, including those of the Temporary Corporate Credit Union Stabilization Fund.
According to the regulator, assessments charged to federally insured credit unions may be reduced as a result of the recoveries by the stabilization fund.
Matz said during the NCUA's March board meeting that credit union refunds from the stabilization fund will not be available until 2021.
According to the NCUA, the regulator has additional litigation pending in federal court in Kansas City, Mo., against Credit Suisse for sales of faulty residential mortgage-backed securities to U.S. Central, Southwest and WesCorp corporate credit unions.
The agency has additional lawsuits pending against several other firms based on the sale of faulty securities, as well as further litigation pending against various residential mortgage-backed securities trustees and LIBOR banks related to corporate credit union losses.
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