WICHITA, Kan. The U.S. Court of Appeals for the Tenth Circuit has agreed to review a lower court’s July 9 ruling dismissing the credit union regulator’s claims against Barclays Capital for the sale of $555 million of faulty mortgage-backed securities the bank sold 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.
The same appeals panel is currently reviewing separate NCUA claims against Wall Street for the collapse of five corporate credit unions.
In his July 9 decision, Judge John Lungstrum ruled NCUA waited too long to satisfy the statute 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.
Judge Lungstrum also affirmed an earlier order and dismissed all of NCUA’s claims against Credit Suisse related to $590 million of MBS sold to the two corporate giants, dealing a major blow to the credit union regulator's efforts to recover billions of dollars in losses for the failure of U.S. Central, WesCorp and three other corporate credit unions, Members United Corporate FCU, Southwest Corporate FCU and Constitution Corporate FCU.
The appeals court’s ruling will go a far way to determining whether NCUA will collect on some $9 billion in claims it has against the various Wall Street banks, which also includes JP Morgan Chase, Goldman Sachs, UBS, RBS Securities and three defunct Wall Street banks that live on as subsidiaries of larger banks, Wachovia Capital, Washington Mutual and Bear Stearns.