WICHITA, Kan. A federal appeals court on Friday directed NCUA and Barclays Capital to negotiate a possible settlement of claims in the corporate credit union crisis, as a preliminary step to formal review of a lower court ruling dismissing NCUA’s $555 million suit against the Wall Street bank.
The purpose of the mediation session is to explore any possibilities for settlement and to resolve procedural issues, according to an order issued by the U.S. Court of Appeals for the Tenth Circuit. The session is scheduled as a telephone conference call for August 15.
NCUA has asked the court to review last month's ruling by the lower court finding that NCUA waited too long to file claims against Barclays for the sale of faulty mortgage-backed securities to U.S. Central FCU and WesCorp FCU.
The appeals court, which has jurisdiction over Kansas-based U.S. Central, has set an August 28 deadline for NCUA to file a written brief in the case, one of several pending over the sale of faulty MBS to the failed corporates.
In his July 9 decision, Judge John Lungstrum ruled NCUA waited too long to satisfy the sthree-year tatute of limitations before filing the claims, which came in September 2012, as much as six and seven years after Barclay’s sold the MBS to U.S. Central and WesCorp. The same court, the U.S. District Court for the District of Kansas, also dismissed NCUA's claims against Credit Suisse.
A separate appeals court in California, for the Ninth Circuit, has accepted NCUA’s appeal of a similar ruling finding the credit union regulator waited too long to file suit against Goldman Sachs for the sale of faulty MBS to U.S. Central and WesCorp.