On February 3, 2016, a national bank announced in its SEC filing that it has reached a $1.2 billion agreement in principle with the United States Department of Justice (“DOJ”), the United States Attorney’s Office for the Southern District of New York, the United States Attorney’s Office for the Northern District of California, and the United States Department of Housing and Urban Development (“HUD”), collectively “the Government,” to resolve civil claims relating to the bank’s Federal Housing Administration (“FHA”) lending program.
Civil claims against the bank have been pending in the United States District Court for the Southern District of New York since 2012. In 2012, the Government brought an action under the False Claims Act alleging that the bank violated various FHA guidelines and requirements relating to the self-reporting of over 6,000 materially deficient loans, the training of its employees, its management practices, and its compensation of FHA underwriters.
Those claims relate to the bank’s FHA lending program between 2001 and 2010. According to the bank’s Form 8-K, the tentative settlement also will resolve other potential civil claims relating to the bank’s FHA lending activities for other periods. The settlement agreement has yet to be finalized.