Barclays agreed to pay $325 million to settle the civil lawsuits filed by the National Credit Union Administration (NCUA). The British bank did not admit any wrongdoing in the settlement.
According to the British bank, the lawsuits were part of the residential mortgage-backed securities (RMBS) claims, which were disclosed in its 2015 interim results.
Barclays said the $325 million settlement will be included in its third-quarter Interim Management Statement, which will be released on October 29, 2015.
The British bank added that it continues to litigate other RMBS claims and RMBS repurchase requests. Barclays also continues to respond to the requests of various regulatory and government authorities in connection with their mortgage-related investigations.
The stock price of Barclays is up by more than 1% to $15.76 per share at the time of this writing around 12:15 in the afternoon in New York.
NCUA allegations against Barclays
In 2012, the NCUA filed a lawsuit against Barclays on accusations that the British bank misrepresented the quality of the $555 million worth of RMBS sold to credit unions.
The NCUA alleged that Barclays sold riskier RMBS to the U.S. Central Federal Credit Union and Western Corporate Federal Credit Union.
According to the credit union regulator, Barclays failed to comply with underwriting standards outlined in the offering documents, which made the RMBS less stable than the expectations of the credit unions.
NCUA to dismiss all pending charges against Barclays after settlement
According to the credit union regulator, it will dismiss all pending lawsuits against Barclays in federal district courts in New York and Kansas after the completion of the settlement.
In a statement, NCUA Board Chairman Debbie Matz said, “In order to help minimize losses and future costs to the credit union system, NCUA is committed to pursuing recoveries against financial firms we maintain contributed to the corporate crisis.”
She added, “The agency has a statutory obligation to secure recoveries for credit unions and ensure that consumers remain protected, and we take that responsibility very seriously.”
The NCUA is still pursuing litigations against other financial services firms including Credit Suisse, Goldman Sachs, Morgan Stanley, and UBS in connection with the sale of faulty securities that caused the collapse of five corporate credit unions. The lawsuits are filed in the federal courts in California, Kansas, and New York.