The NCUA won a big legal victory Aug. 27 when the U.S. 10th Circuit Court of Appeals in Denver ruled the regulator can proceed with its claims against Wall Street firms over mortgage backed securities sold to the failed U.S. Central Federal Credit Union.
The appeals court affirmed the ruling of the Federal District Court in Kansas last year that a federal extender statute, which allowed NCUA more time to file its lawsuits, applied in the cases of the agency's securities law claims. The defendants in the suits—RBS Securities, Wachovia and nine other defendants who sold 29 MBS to U.S. Central—had argued the agency had filed its claims too late and asked the court to dismiss them.
The bankers claimed that the NCUA was required to file the suits within a three-year statute of limitations they said began when U.S. Central first purchased the investments. The NCUA countered that the clock started ticking when it placed U.S. Central into conservatorship in March 2009.
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