Credit Suisse Pays $400 Million to End Mortgage-Securities SuitBy
Agreement settles U.S. regulator’s 2012 claims over MBS sales
NCUA says sales spurred collapse of corporate credit unions
Credit Suisse Group AG paid $400 million to settle a U.S. regulator’s claims that the bank’s improper sales of mortgage-backed securities contributed to the collapse of three corporate credit unions, the agency said Wednesday.
The agreement with the National Credit Union Administration resolves allegations in a 2012 lawsuit filed by the agency over the Zurich-based bank’s sales to corporate credit unions -- financial institutions that provide loans and other services to customer-facing credit unions. Credit Suisse settled without admitting or denying wrongdoing, NCUA said.
This is the latest in a series of deals NCUA has struck with big banks over their securities sales “with the aim of holding responsible parties accountable,” NCUA Acting Chairman J. Mark McWatters said in a statement. The agency has collected more than $5.1 billion.
Credit Suisse’s settlement is tied to losses at U.S. Central Federal Credit Union, Southwest Corporate Federal Credit Union and Western Corporate Federal Credit Union, the agency said. It follows a related judgment last year in which NCUA was awarded about $60 million in a separate lawsuit against the lender in federal district court in New York.
“We are pleased that with the finalization of this settlement, another legacy matter has been resolved,” Credit Suisse said in a statement Wednesday, adding that the bank had “fully provisioned” for the payment to NCUA.
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