The settlement, involving its subsidiary RBS Securities, relate to the two residential mortgage-backed securities (RMBS) cases filed in federal courts in California and Kansas in the NCUA's role as the liquidating agent for Western Corporate Federal Credit Union and US Central Federal Credit Union.
The bank said: “The settlement amount is substantially covered by existing provisions as of 30 June 2016 and will have no material impact on the RBS Group’s CET1 ratio.”
With the RBS settlement, the US regulator takes its recoveries from various banks to $4.3bn in lawsuits pertaining to sale of mortgage-backed securities before the 2008 financial crisis, Reuters reported.
NCUA Board Chairman Rick Metsger said that the regulator plans to continue "to pursue recoveries against financial firms that we maintain contributed to the corporate crisis."
NCUA said in a statement that RBS did not admit to any wrong-doing in the mortgage cases under the settlement.
In a similar settlement in 2015, RBS agreed to pay $129.6m to settle a federal lawsuit filed by the NCUA in New York.
In January, the bank said that it had made provisions of $4.95bn to resolve lawsuits over mortgage-backed securities, investment products packaged and sold before the US housing meltdown and financial crisis in 2008.
The lender said: “RBS continues to litigate various other RMBS-related civil claims identified in its disclosure, including those of the Federal Housing Finance Agency, and to respond to investigations by the civil and criminal divisions of the US Department of Justice and various other members of the RMBS Working Group of the Financial Fraud Enforcement Task Force (including several state attorneys general).”
RBS added that mortgage-related litigation and investigations may need additional provisions.
Image: RBS Gogarburn building. Photo: courtesy of Royal Bank of Scotland.
