Radian Group Inc. (RDN: Quote) said Thursday that its mortgage insurance subsidiary, Radian Guaranty Inc., has reached a settlement agreement with the Consumer Financial Protection Bureau, or CFPB, to resolve a previously disclosed federal investigation of the company's participation in captive reinsurance arrangements.
As part of the settlement, which was filed earlier Thursday in the U.S. District Court for the Southern District of Florida, Radian agreed not to enter into new captive reinsurance arrangements for a period of ten years and to pay a civil penalty of $3.75 million.
The settlement agreement, which remains subject to Court approval, will conclude the CFPB's investigation with respect to Radian without the CFPB making any findings of wrongdoing in its investigation or in the settlement.
Radian and other mortgage insurers remain subject to an investigation by the Minnesota Department of Commerce relating to their captive reinsurance arrangements, and they are currently facing private lawsuits alleging, among other things, that their captive reinsurance arrangements constitute unlawful payments to mortgage lenders under the federal Real Estate Settlement Procedures Act.
Radian plans to vigorously defend the company in that investigation and against those claims.
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by RTT Staff Writer
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