RBS to pay £360m under New York deal

Royal Bank of Scotland has agreed to pay $500 million (£360m) to New York state for deceptive practices while marketing and selling mortgagebacked securities before the 2008 financial crash.

New York attorney-general Eric Schneiderman said the settlement includes $100m in cash to the state and $400m worth of consumer relief for New York homeowners and communities.

RBS admitted that it sold investors residential mortgage-backed securities that failed to comply with underwriting guidelines. Schneiderman said the bank’s actions harmed “countless New York homeowners and investors” by contributing to the crash in home values.

The majority taxpayerowned bank made its first annual profit in ten years recently, but warned that its 2018 earnings could be hit by a pending multi-billion dollar settlement with the US Department of Justice over its sub-prime lending.

Under the latest agreement, RBS will conduct community-level remediation including funding construction of more affordable housing and buying distressed properties to prevent them from being bought by opportunistic investors.

“Today’s settlement is another important step in our comprehensive effort to help New Yorkers rebuild their lives and communities,” Schneiderman said.

Last July, RBS reached a $5.5bn settlement in the US with the Federal Housing Finance Agency over mis-selling of residential mortgagebacked securities. 0 Ross Mcewan, Royal Bank of Scotland CEO