ALEXANDRIA, Va. (7/12/13)--The National Credit Union Administration did not comment Thursday on whether it will appeal the decisions by a federal judge in Kansas dismissing its claims for losses from the sale of residential mortgage backed securities to U. S. Central FCU and Western Corporate FCU by Barclays Capital and Credit Suisse. However, it said it is reviewing the decisions.
"We respectfully disagree with the rulings, and we are reviewing them," said NCUA spokesman John Fairchild, public affairs specialist. "We will continue to vigorously pursue our claims against the parties that sold the faulty securities to the corporate credit unions."
The suits, part of eight suits filed in U.S. District Court in Wichita, Kan., as well as suits against brokers in other districts, were filed by NCUA acting as the corporates' liquidating agent and were an attempt to recoup losses from the RMBs that contributed to the corporates' conservatorship and liquidation in 2009.
In the rulings Wednesday, U.S. District Judge John W. Lungstrum said NCUA'a claims were time-barred, which meant NCUA did not file the lawsuits against the brokerage firms in time. NCUA had argued that it had met the statute of limitations for filing the lawsuits because it had entered into a tolling agreement that delayed the filing deadlines and that it had an extended time to file under an "extended statute."
Lungstrum said that NCUA was required to file the claims by March 20, 2012, three years after it was appointed conservator of U.S. Central and WesCorp, but that NCUA did not initiate the suit until Sept. 25, 2012.
The case has implications for other lawsuits filed by NCUA against brokerage firms that sold RMBS certificates to various corporate credit unions and that use the same arguments relying on tolling agreements and extender statutes. It also has implications for lawsuits filed by other agencies such as the Federal Deposit Insurance Corp., which had submitted an amicus brief supporting NCUA's arguments in the Credit Suisse case. The judge rejected FDIC's arguments as well as NCUA's.
See related story: Court Dismisses NCUA Lawsuit Over Corporate CU Losses Vs. Barclays in Thursday's News Now by using the link.