...FHFA Suits Expensive for Banks: Large banks have paid roughly $16bn to settle lawsuits filed by the Federal Housing Finance Agency (FHFA) in 2011. The settlements have not resulted in any negative rating actions, as the impact was viewed as manageable relative to firms' increasing profitability. In Fitch Ratings' view, one of the major post-crisis legal issues is now largely in the industry's rearview mirror. Most Banks Agreed to Settle: Of the 18 institutions named in the suits, 11 have now settled; none has indicated that it plans to go to trial. Evidently, litigation was considered too risky given the potential amounts involved. As a percentage of face value, 72% of the aggregate exposure has been resolved, as most banks with the largest exposure have settled. Fitch expects additional payments could potentially reach $8bn, bringing the total to $24bn. Unprecedented Size and Speed: In aggregate, the FHFA settlements represent one of the largest legal settlements in U.S. history, particularly...
