Appeals court backs NCUA in RMBS lawsuits
Aug. 28, 2013 – The 10th Circuit Court of Appeals ruled with the NCUA in its case against major Wall Street firms that sold residential mortgage-backed securities to now-defunct credit unions, allowing the agency more time to proceed with the lawsuits.
In a press statement Tuesday evening, NCUA Board Chairman Debbie Matz said, “We’re pleased with the Court’s decision. We will continue to pursue our claims against firms that sold faulty mortgage-backed securities to corporate credit unions. As liquidating agent for the corporate credit unions, NCUA has a duty to maximize recoveries from responsible parties in order to limit losses to federally insured credit unions.”
Earlier this year a Federal District Court judge in Kansas dismissed NCUA’s suit seeking recoveries from Barclays Capital, claiming the agency did not file suit in a timely manner. The appeals court ruled that a federal “extender” statute, which allowed NCUA more time to file its lawsuits, does apply in the cases of the agency’s claims.
NCUA has filed lawsuits against several other firms – Barclays Capital, Credit Suisse, Goldman Sachs, J.P. Morgan Securities, RBS Securities, UBS Securities, Wachovia, Washington Mutual and Bear Stearns – alleging violations of federal and state securities laws in the sale of mortgage-backed securities to five corporate credit unions.
The agency has reached $335 million in settlements with Bank of America, Citigroup, Deutsche Bank Securities and HSBC.