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NCUA recently settled on a $29 million offer of judgment from Credit Suisse as partial recompense for poorly funded residential mortgage-backed securities purchased by two failed corporate credit unions — Members United and Southwest Corporate Credit Unions. On top of that agreement, a court added $21.3 million in prejudgment interest. The Swiss banking institution also will be responsible for attorneys’ fees and expenses, which will further increase the payout.
“NCUA’s litigation efforts fulfill its statutory obligation to secure recoveries for credit unions and help protect consumers,” according to a statement from Debbie Matz, NCUA’s chairman. “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.”
The NCUA noted it was the first federal financial institutions regulator to recover losses from investments in these securities on behalf of failed financial institutions. Credit Suisse also faces federal court suits in Kansas on behalf of other corporate credit unions and similar RMBS.
