WICHITA, Kan. Lawyers for more than a half-dozen Wall Street banks on Friday joined together in an unusual motion to urge the federal court here to stay proceedings in the various civil suits NCUA has brought against them until a federal appeals court has decided whether the credit union regulator waited too long to bring claims for the failure of five corporate credit unions.
The motion comes as the various entities and NCUA are scheduled to meet in court Monday morning to air their concerns over the various cases, in which NCUA is seeking approximately $10 billion in recompense for the failed corporates.
The banks told the court they agree the individual cases should be stayed pending a ruling by the U.S. Court of Appeals for the Tenth Circuit, which is reviewing similar claims brought by NCUA against RBS Securities and Wachovia Capital, now a unit of Wells Fargo.
Joining in the unusual judicial motion are JP Morgan Chase, which is being sued for more than $7 billion of mortgage-backed securities sold to the corporates by it and two banks it subsequently acquired, Bear Stearns and Washington Mutual; UBS Securities, and Credit Suisse Securities, among others.
The federal court, the U.S. District Court for the District of Kansas, where U.S. Central FCU was based, also is expected to review a proposal to consolidate the cases, in which NCUA makes similar claims of negligence in the sale of the MBS, which failed soon after their issuance. The banks object to a consolidation, saying each of the cases has separate claims, defendants, originators, disclosures, loans and evidence.
The appeals court has scheduled oral arguments for the RBS and Wachovia cases on May 8.