The National Credit Union Administration announced this week that it reached a $69.8 million settlement with UBS, as the company becomes the latest to settle with the NCUA over losses related to several corporate credit unions’ purchases of faulty residential mortgage-backed securities in the run-up to the financial crisis.
According to the NCUA, it will receive $69.8 million from UBS in damages and interest for claims arising from losses to Members United Corporate Federal Credit Unionand Southwest Corporate Federal Credit Union.
Bank will pay $29 million to failed credit unions
The National Credit Union Administration announced earlier this week that it reached a $29 million settlement with Credit Suisse over losses related to several corporate credit unions’ purchases of faulty residential mortgage-backed securities in the run-up to the financial crisis.
Credit Suisse becomes the latest to settle with the NCUA over the failure of Members United Corporate Federal Credit Union and Southwest Corporate Federal Credit Union.
In 2013, the NCUA filed suit against Royal Bank of Scotland, Morgan Stanley and eight other institutions over the sale of nearly $2.4 billion in mortgage-backed securities to U.S. Central Federal Credit Union, Western Corporate Federal Credit Union, Members United Corporate Federal Credit Union and Southwest Corporate Federal Credit Union.
In October 2015, Barclays and Wachovia, now a part of Wells Fargo, said they would pay a total of $378 million to NCUA as part of two separate settlements stemming from losses related to purchases of residential mortgage-backed securities.
In September 2015, RBS agreed to a $129.6 million settlement with the NCUA over similar claims. And in December 2015, Morgan Stanley agreed to pay $225 million to settle as well.
Big banks: Credit unions should pay federal tax
Oh, the whining banksters that will steal even the gold tooth in your mouth got their panties in a wad because depositors are leaving them in droves. Bummer huh?
Congressional lawmakers currently working on tax reform are caught in a war of words between banks and credit unions.
At issue is the longtime federal tax exemption for credit unions: The credit unions want to keep it, while the banking industry wants it to end.
“Credit unions offer the same products as banks, and yet they get a tax exemption that costs taxpayers $2 billion a year,” said James Ballentine, chief lobbyist for the American Bankers Association, an industry trade group.
“It’s just fairness for the banking community and the taxpayers to stop the exemption,” he said.
The ABA has been pushing to end the tax exemption for years, but in the past few weeks, with tax reform talks on Capitol Hill, it has stepped up its efforts with lawmakers to include a media blitz of radio and print ads in the Washington, D.C., area.
Financial institutions have pulled back on mortgage lending since the housing bubble burst, but credit unions have increased their mortgage lending substantially.
According to CreditUnions.com, credit unions originated 60% more first mortgages during the first nine months of 2012 compared to the first nine months of 2011.
Read more: http://www.foxbusiness.com/personal-finance/2012/12/05/credit-union-could-be-your-best-source-for-mortgage/#ixzz2GDbIqipM
California credit unions took advantage of the Home Affordable Refinance Program and originated twice as many home loans in second quarter than the previous three months.
These smaller lenders wrote a collective $9.6 billion in mortgages, up from $4.6 billion at the beginning of the year. Like larger banks, credit unions were able to pick up some business from an expanded HARP, which allowed more underwater borrowers to refinance theirFannie Mae and Freddie Mac loans.
Many of the largest banks tied off new HARP to just the loans they service, and some borrowers exhausted with poorly managed government programs in the past even bypassed the largest banks for their more approachable credit unions.
“Credit unions are the good guys in all of the problems in housing. That was a big part of the inflow. The larger banks are just too big and bureaucratic,” said Diana Dykstra, CEO of the California and Nevada Credit Union Leagues.