NEW YORK— In litigation that dates all the way back to the 2008 financial crisis, NCUA and U.S. Bank have reached a tentative settlement in a case involving mortgage-backed securities and corporate credit union investments, according to court filings. Final terms of the settlement were not available.
The dispute centers on U.S. Bank’s role as trustee for residential mortgage-backed securities (RMBS) trusts. The NCUA had accused the bank of violating its fiduciary duties, breaching contracts and negligence by failing to enforce repurchase obligations and address defects in underlying mortgage loans, according to Law360 and other news reports.
In a joint letter filed Oct. 2 with federal Judge Louis Stanton in Manhattan, the parties said they “reached an agreement in principle” and requested a 30-day halt in further proceedings while they finalize the terms and a dismissal, National Mortgage News reported.
Dismissed With Prejudice
Judge Stanton dismissed the case “with prejudice” — typically meaning the case is closed permanently — though either side may seek to reopen it within 30 days, the report added.
Financial terms were not disclosed in the filings. According to reports, but the litigation was over several-billion dollars in RMBS exposure, as the CU Daily has previously reported.
The lawsuit dates all the way back to December 2018 and involved U.S. Bank’s handling of more than 50 RMBS trusts.
The case is one of several the NCUA has either won or reached a settlement in in the nearly two decades since the financial crisis.
