In a decision immediately called “good news for credit unions” by the National Credit Union Administration Tuesday, the U.S. Court of Appeals for the 10th Circuit reinstated its ruling that allowed the NCUA to sue several banks for alleged deceptive practices when selling mortgage-backed securities.
The NCUA has brought suit against certain banks while serving as the liquidating agent of several failed corporate credit unions, alleging that deceptive information was used to form, market and sell the mortgage-backed securities.
Banks have claimed in the case that the NCUA missed a three-year window to file suit. The Denver-based 10th Circuit Court of Appeals, however, sided with the federal credit union regulator, citing a past provision that extends the deadline for a government regulatory agency to sue on behalf of a failed financial institution.
But on June 16 the U.S. Supreme Court vacated and remanded for further consideration that 10th Circuit ruling.
The directive from the Supreme Court to the circuit court did not necessarily indicate a need for the 10th Circuit to change its opinion. Rather it instructed the lower court to look at its decision in light of a new Supreme Court ruling, established in an environmental case, which defined the difference between statutes of limitation and statutes of repose, and whether various forms of “pausing” the period of time set forth by statute apply to statutes of repose.continue reading »