The Nomura Asset Acceptance Corp. and Nomura Home Equity Loan Inc. have jointly agreed to pay more than $3 million in order to settle claims from the National Credit Union Administration that Nomura sold faulty residential mortgage-backed securities that led to the failures of two corporate credit unions.
The settlement is yet another victory for NCUA as it goes after the bad actors that contributed to the corporate credit union meltdown. To date, NCUA has recovered more than $4 billion, but at the cost of more than $1 billion in legal fees (approximately 23% of total recoveries).
"Every recovery NCUA makes through our legal efforts reduces the possibility of further costs of the corporate resolution being shouldered by credit unions," NCUA Board Chairman Rick Metsger said in a statement.
"Our legal team continues to work to fulfill the agency's statutory responsibilities to protect the credit union system and to pursue recoveries against financial firms we maintain contributed to the corporate crisis."
The settlement covers claims the NCUA Board asserted in 2011 as liquidating agent for Western Corporate Federal Credit Union and U.S. Central Federal Credit Union. NCUA filed suit in federal district courts in California and Kansas against the Nomura entities. NCUA said it will dismiss pending suits against both firms as a result of the settlement, though neither firm admitted fault as part of the settlement agreement.
NCUA still has litigation pending against other financial institutions tied to the corporate meltdown, including Credit Suisse and UBS Securities, as well as various residential MBS trustees and Libor banks related to corporate losses. While the agency has indicated that credit unions are unlikely to be subject to further assessments for the Corporate Stabilization Fund, credit unions are unlikely to receive refunds of paid assessments for several years.
