The National Credit Union Administration (NCUA) said it will receive roughly $5.25 million from HSBC for settling claims against the banking giant related to MBS it sold to five now defunct corporate credit unions.It is the third out-of-court settlement reached by NCUA over the corporate failures, following November deals with Deutsche Bank for $145 million and with Citigroup for $20.5 million.
NCUA has civil claims pending against RBS Securities, JPMorgan Chase, Goldman Sachs, and Wells Fargo over MBS sold to corporate credit unions that went under because of the investments. The failures include: U.S. Central Federal Credit Union, WesCorp Federal Credit Union, Members United Corporate Federal Credit Union, Southwest Corporate Federal Credit Union, and Constitution Corporate Federal Credit Union.
The corporate failures are projected to cost the credit union system as much as $20 billion to resolve.
Like the settlements with Citigroup and Deutsche Bank, the deal with HSBC does not admit fault on their part.
“This is NCUA's third favorable settlement of actionable claims. We appreciate HSBC's efforts to resolve potential claims so that we can avoid the expense and delay of litigation,” said NCUA chairman Debbie Matz.
