Recoveries from Wall Street firms have now reached $3 billion for the NCUA following a settlement with Goldman Sachs. The NCUA will received $575 million from Goldman Sachs for faulty mortgage-backed securities that were sold to five corporate credit unions between 2005 and 2007.
Goldman Sachs is paying out $5 billion to settle lawsuits with the NCUA, as well as with the U.S. Department of Justice and other governmental plaintiffs. The settlement resolves two lawsuits filed by NCUA as liquidating agent for three corporate credit unions — U.S. Central, WesCorp, and Southwest.
“Credit unions are benefitting from an aggressive litigation strategy NCUA continues to follow in order to hold responsible parties accountable,” NCUA Chairman Debbie Matz said. “The recovery from the settlement announced today by the Justice Department, combined with the $2.5 billion already recovered, will enable NCUA to greatly reduce the assessments all credit unions have to pay.”
The settlement money is used to pay claims against five failed corporate credit unions, including those of the Temporary Corporate Credit Union Stabilization Fund. The NCUA was the first federal financial institutions regulator to recover losses from investments in faulty securities on behalf of failed financial institutions.
The NCUA still has litigation pending against several financial institutions, including Credit Suisse, RBS Securities, and UBS Securities, alleging they sold faulty mortgage-backed securities to four corporate credit unions: WesCorp, U.S. Central, Southwest and Members United.
You can read the full release on the NCUA’s website and more analysis from Yahoo Finance.