ALEXANDRIA, Va. (UPDATED: 11:00 A.M. ET)--HSBC has agreed to pay the National Credit Union Administration (NCUA) $5.25 million to settle potential claims relating to the sale of residential mortgage-backed securities to five failed corporate credit unions, the agency reported today.
The NCUA said HSBC did not admit fault on their part.
NCUA Chairman Debbie Matz said the agency appreciates HSBC's efforts to resolve potential claims and avoid the expense and delay of litigation. "This settlement furthers our goal to minimize losses and thereby reduce the assessments that all credit unions will have to pay. NCUA will continue to fulfill our statutory responsibility to secure maximum recoveries for credit unions and ensure that consumers remain protected," she added.
The agency is using proceeds from this and other settlements to reduce assessments that are charged to credit unions to cover corporate credit union losses.
The agency also collected $165.5 million in funds after it settled with Citigroup and Deutsche Bank Securities last year.
The NCUA is seeking to recover an additional $2 billion from the Royal Bank of Scotland, RBS Securities, JP Morgan Securities, and Goldman Sachs in suits it has filed against these entities. There may be additional recoveries from other firms that sold residential mortgage-backed securities to corporate credit unions that contributed to their losses.