ALEXANDRIA, Va. – NCUA said this morning it will received $5.25 million from HSBC for settling claims against the banking giant related to mortgage-backed securities it sold to five failed 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 also has civil suits pending against RBS Securities, JP Morgan Chase, Goldman Sachs & Co. and Wells Fargo over MBS sold to the corporate failures—U.S. Central FCU, WesCorp FCU, Members United Corporate FCU, Southwest Corporate FCU and Constitution Corporate FCU.
The corporate failures are projected to cost the credit union system as much as $20 million 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.
