WICHITA, Kan. (7/10/13, UPDATED 5 p.m. CT)--Saying that the claims are time-barred, a federal court in Wichita, Kan., today dismissed the National Credit Union Administration's lawsuit against Barclays Capital over the sale of residential mortgage-backed securities (RMBS) that caused losses to U.S. Central FCU and Western Corporate FCU.
Also, in a separate ruling today, U.S. District Judge John W. Lungstrum reaffirmed an earlier ruling he made in a similar lawsuit filed by NCUA against Credit Suisse Securities: that a tolling agreement NCUA had entered with the defendants, and which NCUA had argued extended the time allowed to file the lawsuits, "is not effective in extending the applicable three-year limitations period under the Extender Statute."
NCUA had argued in eight cases filed against brokerage firms in the court and other districts that it had met the statute of limitations for filing the lawsuits because of tolling agreements that delayed filing dates or because of the statute that extended the time to file in certain situations.
The dismissal, if upheld by higher courts, likely will impact not only NCUA's lawsuits but other agencies as well. The court ruling specifically mentioned an amicus brief filed by the Federal Deposit Insurance Corp. as part of the Credit Suisse case and rejected the FDIC's arguments.
NCUA's suit against Barclays related to 12 RMBS certificates sold to the two corporates, which were liquidated as a result of losses stemming from investments prior to the financial crisis.
The Credit Union National Association is studying the court documents, and News Now will have more details in Thursday's issue.