ALEXANDRIA, Va. (4/3/13)--The total amount of funds recovered from National Credit Union Administration securities lawsuits now totals more than $335 million after Bank of America and certain subsidiaries agreed to settle with the agency.
Bank of America has agreed to pay $165 million to the NCUA under the terms of the settlement announced on Tuesday. The agency has also settled with Citigroup, Deutsche Bank Securities, and HSBC, avoiding the cost of litigation and bringing in more than $170 million in funds that were lost due to the corporate credit union investments.
Bank of America is one of several Wall Street Firms the NCUA has pursued legal action against, alleging violations of federal and state securities laws when they sold billions in residential mortgage-backed securities that later failed to now-defunct corporate credit unions.
Bank of America did not admit fault under the terms of the settlement.
"As a result of the Bank of America settlement, NCUA has now successfully recovered more than a third of a billion dollars on behalf of credit unions," NCUA Board Chairman Debbie Matz said in a release. "These settlements and our ongoing lawsuits further NCUA's goal of minimizing the losses of the corporate crisis and cutting future costs to credit unions," she added.
Funds recovered through these legal actions will be used to help reduce the amount of future corporate stabilization assessments on credit unions, according to the NCUA.
Matz said the NCUA has "a statutory obligation to secure recoveries for credit unions and ensure that consumers remain protected. The NCUA "will continue to expend every possible effort to fulfill that important responsibility," she added.