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RBS Plans to Settle Litigation

Royal Bank of Scotland (RBS) CEO Ross McEwan has stated that the bank is in talks to settle one of the two major U.S. investigations into allegations it mis-sold mortgage-backed securities. The bank had previously felt a reprieve in the case following the firing of acting Attorney General Sally Yates.

As head of the U.S. Department of Justice, Yates was in charge of any potential settlement with the U.K. based bank in connection to its sale of toxic mortgage-backed securities (MBS) leading up to the 2008 financial crisis.

The bank was one of 18 financial institutions sued by the by the Federal Housing Finance Agency (FHFA) in 2011 to recoup U.S. taxpayer costs following the government's $187.5 billion bailout of Fannie Mae and Freddie Mac in 2008.

McEwen stated that the bank could settle a lawsuit by the Federal Housing Finance Agency (FHFA) apart from another investigation by the Department of Justice (DOJ). The DOJ investigation has been stalled due to the changes in the U.S. government since President Trump’s election, Reuters reports.

"They are quite separate ... and we are in discussions with them and we are not in discussions with the DOJ other than them still seeking information," McEwan told reporters at bank's annual shareholder meeting in Edinburgh.

RBS had  previously settled for $85 million in regards to charges by the Commodity Futures Trading Commission that its traders tried to manipulate a critical benchmark in the interest rate swaps market for more than five years.

RBS has set aside a total of $8.3 billion in litigation “provisions” to date.

"Putting our legacy litigation issues behind us, including those relating to RMBS, remains a key part of our strategy,” said McEwan previously. “It is our priority to seek the best outcome for our shareholders, customers and employees."

About Author: Seth Welborn

Seth Welborn is a contributing writer for DS News. He is a Harding University graduate with a degree in English and a minor in writing, and has studied abroad in Athens, Greece. An East Texas native, he also works part-time as a photographer.

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