DENVER (3/4/15)--The U.S. Court of Appeals for the Tenth Circuit has restored a National Credit Union Administration lawsuit that had charged Barclays Capital Inc. with misrepresenting the quality of more than $550 million in residential mortgage-backed securities (RMBS) sold to corporate credit unions.
"These cases are extremely important to credit unions, and this is another positive step forward," said Robin Cook, CUNA senior director of advocacy and counsel for special projects. He added, "NCUA so far has recovered more than $1.75 billion from the big banks, a huge achievement that has helped reduce corporate stabilization assessments on credit unions."
The court order overturns a 2013 ruling by U.S. District Judge John W. Lungstrum in Wichita, Kan., that dismissed the NCUA's claims on the grounds they were time-barred and NCUA hadn't filed its case in time. NCUA, however, entered into an agreement with Barclays that would have extended the time it had to file these cases.
In the 10th Circuit ruling filed Tuesday, the court, in part, ruled "Barclays expressly promised not to raise the statute of limitations defense if doing so would require inclusion of time periods that the parties agreed to exclude, and we hold Barclays to that promise."
The cases will now proceed to discovery.