Close

Are you in compliance?

Don't miss out! Sign up today for our weekly newsletters and stay abreast of important GRC-related information and news.

RBS reaches $5.5B settlement with FHFA

Jaclyn Jaeger | July 12, 2017

The Federal Housing Finance Agency (FHFA), as conservator of Fannie Mae and Freddie Mac, today announced it has reached a $5.5 billion settlement with Royal Bank of Scotland Group.

The settlement agreement resolves all claims in the lawsuit FHFA v. The Royal Bank of Scotland Group in the U.S. District Court for the District of Connecticut.

FHFA filed this lawsuit in its role as conservator alleging violations of federal and state securities laws in connection with private-label residential mortgage-backed securities (PLS) trusts purchased by Fannie Mae and Freddie Mac between 2005 and 2007. Under the terms of the agreement, RBS will pay approximately $4.52 billion to Freddie Mac and approximately $975 million to Fannie Mae and certain claims against RBS related to the securities involved will be released. 

FHFA filed a total of 18 lawsuits in 2011 as conservator of Fannie Mae and Freddie Mac alleging violations of various statutory provisions by participants in the mortgage finance sector. The settlement with RBS represents settlement of the seventeenth case of those filed by FHFA. FHFA received a favorable verdict after trial in the eighteenth case, of which is currently the subject of an appeal.