Federal judge GeorgeH.Wuthis week delivered what could be a fatal blow to the NCUA's suitsagainst big banks that seek to recover billions in losses sufferedby corporate credit union investments in mortgage-backed securitieswhen the jurist wrote in a preliminary ruling that the NCUA suitagainst RBS was out of compliance with applicable statutes oflimitations.

Those statutes, said Wu, specify a three-year limit from thetime of purchase of the involved securities. That dates back to2005, in the matter at hand, which is NCUA's suit against RBS over $685 million in MBS losses suffered by the now-defunctWesCorp.

This suit was filed in July 2011.

Observers indicated that, if Wu's ruling prevails, this maythrow into doubt the future of similar NCUA suits against GoldmanSachs,JPMorganChaseand Wachovia.

At NCUA, a spokesperson offered this comment: “Judge Wu has notissued any final ruling in this matter but rather has issued onlytentative findings. We disagree with many of his tentative findingsand note that he has requested a full round of additional briefingsas well as another hearing to be held in January. We remainconfident in our positions and intend to continue to aggressivelypursue recovery in this litigation as well as from othersresponsible for losses to the credit union system.”

A Southern California observer who has closely followed Wu'sbehavior in the ongoing case of NCUA versus the inside officersat WesCorp indicated that Wu's practice appears to be to file apreliminary ruling, seek comment, and then to make the preliminaryruling final with little change. That is what he did when hedropped the NCUA case against WesCorp's outside directors, forinstance.

Wu has indicated he will rule on an RBS motion to dismiss earlyin 2012.