Royal Bank of Scotland Reaches $5.5 Billion Settlement in Mortgage Case

(CN) – The Royal Bank of Scotland on Wednesday reached a $5.5 billion settlement with the Federal Housing Finance Agency over mortgage-backed securities issued before the financial crisis.

The deal  resolves claims regarding the issuance and underwriting of approximately $32 billion \ of residential mortgage-backed securities.

In a written statement, RBS CEO Ross McEwan said “Today’s announcement is an important step forward in resolving one of the most significant legacy matters facing RBS and is further evidence of the determination of the bank’s leadership to put our remaining issues behind us.

“This settlement is a stark reminder of what happened to this bank before the financial crisis, and the heavy price paid for its pursuit of global ambitions,” McEwan added.

Under the settlement, RBS will pay $5.5 billion, but be reimbursed for $754 million under indemnification agreements with third parties.

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