(CN) – British bank Barclays said it will pay $325 million to settle claims over its sale of residential mortgage-backed securities to U.S. credit unions.
The underlying lawsuits stem from the National Credit Union Administration’s appointment as conservator for five credit unions that failed during the 2008 financial crisis.
After an investigation revealed that the credit unions failed largely because they had purchased mortgage interests that were worth much less than represented, the NCUA pursued the underwriters of the mortgages, including Barclays Capital, to recover the credit unions’ losses.
Between 2005 to 2008, Barclays underwrote approximately $39 billion in mortgage securitizations in the U.S., according to a New York Times report.
The 10th Circuit allowed NCUA’s claims to proceed in March, despite the fact that the lawsuits were filed more than five years after the mortgages in question were sold, and more than three years after the NCUA became conservator for the credit unions.
The NCUA argued, and the appeals court agreed, that Barclays made promises during settlement negotiations to exclude time spent in efforts to settle the cases from a statute of limitations defense.
Barclays did not admit any wrongdoing as part of the settlement. The bank announced the $325 million agreement in a Monday press release.
The NCUA continues to pursue lawsuits against other banks involved in selling resident mortgage-backed securities, including Credit Suisse, Goldman Sachs, Morgan Stanley, and UBS, according to an agency press release.
“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,” NCUA chairwoman Debbie Matz said in a statement.
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