Fines & Penalties Monitor: April 2016

May 13, 2016 at 6:47 PM


This month experienced a renewed uptick in fines, penalties, and settlements incurred by our large bank group – the 18 largest institutions headquartered in the U.S. and E.U. – increasing the year-to-date total by $120.1 million, to $12.6 billion.

Two settlements were responsible for this increase, both paid to the National Credit Union Administration (NCUA). UBS AG and Credit Suisse Group AG were accused by the NCUA of selling faulty mortgage-backed securities and assets to corporate credit unions in the run-up to the financial crisis. According to the NCUA, the agency will receive $69.8 million from UBS and $50.3 million from Credit Suisse for damages and interest arising from investor losses. These two banks are the latest to settle with the NCUA, which has been filing suits against large banks over RMBS sales since 2013. Previous banks who settled with or were fined by the NCUA include RBS, Morgan Stanley, Barclays, and Wachovia (now part of Wells Fargo & Co.). These combined settlements have given the NCUA more than $3.1 billion in legal recoveries related to the sale of RMBS to corporate credit unions.

Since January 2015, when CPG first began researching fines, penalties, and settlements, large banks have paid $22.9 billion to settle RMBS-related cases. This number is expected to steadily increase, as several hundred lawsuits are still pending. While we may still encounter the occasional lull, as we did last month, it is clear that we have not yet reached the end of fine, penalty, and settlement activity for this year.

Lauren Rosenberg

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