Royal Bank of Scotland is reportedly in talks to finally settle one of the two major U.S. investigations into mortgage-backed securities it sold during the financial crisis, an article in Reuters by Andrew MacAskill stated.
According to the article, CEO Ross McEwan has been trying to clean up RBS's balance sheet and end a string of legal cases against the bank.
From the article:
This would open the way for the government to sell its more than 70% stake in RBS held since it had to step in with a more than 45 billion pound ($57.83 billion) bailout during the financial crisis.
The CEO said the bank could settle a multibillion-dollar lawsuit by the U.S. Federal Housing Finance Agency separately from an investigation by the Department of Justice, which has stalled because of changes in the U.S. government since the election of President Donald Trump.
Earlier this year, it appeared as if the bank could be getting closer to a settlement with the DOJ, setting aside $3.8 billion to be used to settle with the government.
However, McEwan cautioned at the time that he wouldn’t speculate on whether changes in the U.S. administration under President Donald Trump could delay the process.
It turns out that it did it did. The Reuters article stated that due to staff changes since Trump became president, a number of key positions at the DOJ remain empty.
The federal government has been seeking restitution for the events that led to the financial crisis for quite some time now, consistently announcing settlements over the years.
Shortly before leaving office, the Obama administration announced multi-billion dollar settlements with two foreign banks, Deutsche Bank and Credit Suisse, for each bank’s crisis-era mortgage securitization practices.
Germany’s Deutsche Bank agreed to settle for $7.2 billion, while Switzerland’s Credit Suisse agreed to a $5.28 billion settlement with the feds.
