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CUNA supports NCUA’s cases against issuers of mortgage-backed securities

(June 16, 2014) — Today, the U.S. Supreme Court vacated and remanded for further consideration a Tenth Circuit Court of Appeals ruling that allowed NCUA to sue a group of banks for allegedly deceiving investors, including failed corporate credit unions, about mortgage-backed securities.  CUNA’s Eric Richard, executive vice president and general counsel, issued the following statement:

“The Supreme Court’s decision does not close the book on these cases, nor does it even pass judgment on whether the Tenth Circuit got it right when it said these cases could proceed despite the limitations period.  Rather, the Supreme Court asked the Tenth Circuit to look at its decision in the context of another decision the Supreme Court issued last week in a completely different area of law, the environmental context.  The Tenth Circuit can still decide it got it right the first time.  NCUA still has many other opportunities, both before the Tenth Circuit and Supreme Court if necessary, to argue that these cases should proceed.  Even if NCUA is ultimately unsuccessful on this issue, there are still other claims against these same defendants that should be unaffected.  Those other claims would still offer the possibility of recovering money on behalf of credit unions.

NCUA’s cases against issuers of mortgage-backed securities are hugely important to the credit union system.  We commend NCUA for leading the way for federal financial regulators and bringing in more than $1.75 billion in funds for credit unions to date.  CUNA supports NCUA on this important issue, and looks forward to additional recoveries on behalf of credit unions and their 99 million members.”

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