Business & Tech

Royal Bank of Scotland reaches $5.5b settlement in US over mortgage securities

Luke MacGregor/REUTERS/Rile

LONDON (AP) — Royal Bank of Scotland says it has reached a $5.5 billion settlement in the United States over mortgage-backed securities issued before the financial crisis.

The deal with the Federal Housing Finance Agency — the conservator of Fannie Mae and Freddie Mac — resolves claims regarding the issuance and underwriting of approximately $32 billion of residential mortgage-backed securities.

RBS CEO Ross McEwan says the announcement is ‘‘an important step forward in resolving one of the most significant legacy matters facing RBS.’’

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McEwan has been at pains in recent months to insist RBS has put its legacy issues behind them.

He says ‘‘this settlement is a stark reminder of what happened to this bank before the financial crisis, and the heavy price paid for its pursuit of global ambitions.’’