Royal Bank of Scotland Group PLC will pay $52 million to settle charges filed by Massachusetts that a unit put unfair residential mortgages into investment pools.
The state's attorney general, Martha Coakley, said in a press release Monday that the bank will put $40.2 million to reducing the principal amounts on more than 700 subprime loans, the third such agreement the state has reached with investment banks.
RBS, now majority-owned by the U.K. government, will also pay Massachusetts $8.9 million and municipalities another $2.6 million. The allegations stem from the former Greenwich Capital Financial Products unit, now known as RBS Financial Products Inc., which the state alleged financed and securitized residential loans that were presumptively unfair.
"We are pleased to have resolved this matter with the Massachusetts attorney general," a spokesman for RBS said in a statement.