Royal Bank of Scotland Group Plc will pay $1.1 billion (£847.07 million) to resolve claims that it sold toxic mortgage-backed securities to credit unions that later failed, the U.S. National Credit Union Administration (NCUA) said.
The resolution comes as RBS prepares to settle a number of U.S. cases where it is accused of mis-selling mortgage-backed bonds and brings the U.S. regulator’s recoveries against various banks to $4.3 billion over their sales of such securities before the 2008 financial crisis.
NCUA Board Chairman Rick Metsger said the regulator plans to continue “to pursue recoveries against financial firms that we maintain contributed to the corporate crisis.”
This case is included in the around $5 billion RBS has set aside to settle historic misconduct charges, but some analysts estimate the total claims will be much larger.
The settlement on Tuesday resolves lawsuits filed in federal courts in California and Kansas in the NCUA’s role as the liquidating agent for Western Corporate Federal Credit Union and U.S. Central Federal Credit Union.
Credit unions were generally pleased with Tuesday’s election results that gave Republicans control of Congress, but acknowledged they suffered a blow from the loss of one of their most vocal advocates, Sen. Mark Udall.
Source: American Banker
Natalie Ludewig is one in a hundred million.
By joining a credit union this summer, Ludewig became one of 100 million credit union customers nationwide, and 5 million in New York state.
Credit unions are snapping up customers at a rapid clip, according to the Credit Union National Association, which released these startling stats last week.
And that’s thanks to lower interest rates on loans and higher yields on savings than many banks offer.
The difference between the structure of credit unions and banks is that credit unions are member-owned, nonprofit organizations while banks seek profits for shareholders.
“When I took my first credit union job . . . people would ask, is that a union — what is it?” said Robert G. Allen, CEO of Smithtown-based Teachers Federal Credit Union, which boasts 241,000 members and assets of just under $5 billion. “The public’s awareness of credit unions has grown dramatically.”