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ALEXANDRIA, Va. (Nov. 2, 2016) – Nomura Asset Acceptance Corporation and Nomura Home Equity Loan, Inc. jointly have agreed to pay more than $3 million to settle claims by the National Credit Union Administration alleging the sale of faulty residential mortgage-backed securities to two corporate credit unions, NCUA announced today.

“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. “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. With this settlement, NCUA will dismiss pending suits against both firms. Neither firm admits fault as part of the settlement agreement.

NCUA was the first federal financial institutions regulator to recover losses from investments in securities on behalf of financial institutions that failed in the wake of the recent financial crisis. The Federal Credit Union Act and NCUA regulations require that net proceeds from recoveries be used to pay claims against five failed corporate credit unions, including those of the Temporary Corporate Credit Union Stabilization Fund. Payments to the Stabilization Fund have permitted NCUA’s repayment of outstanding U.S. Treasury borrowings and decreased the amount credit unions pay for the costs of the corporate credit union resolution.

NCUA still has litigation pending against other financial institutions, including Credit Suisse and UBS Securities, alleging they sold faulty residential mortgage-backed securities to corporate credit unions. NCUA also has pending litigation against various residential mortgage-backed securities trustees and LIBOR banks related to corporate credit union losses.

NCUA provides detailed information about recoveries from securities-related litigation on its Legal Recoveries from the Corporate Crisis webpage.