The National Credit Union Administration filed an appeal this week with the Ninth Circuit U.S. Court of Appeals to reinstate claims against Wachovia Capital (now a unit of Wells Fargo & Co.) and Nomura Asset Acceptance Corp., which both originated subprime loans packaged into mortgage-backed securities that figured into the 2009 failure of WesCorp FCU.
The claims are part of a suit seeking $629 million in damages from RBS Securities and several mortgage originators. A lower court had dismissed the claims against Wachovia and Nomura in August, ruling the claims were not filed in time to satisfy the statute of limitations on securities suits.
NCUA has filed similar appeals against other entities who sold MBS to the failed corporates in the Ninth Circuit, as well as in the Tenth Circuit in Kansas where U.S. Central Corporate FCU was based. In both cases, NCUA asserts that a so-called extender statute allows it and the FDIC to extend the statute of limitations on securities claims until after they take over a failed institution.
John Fairbanks, a spokesman for NCUA, predicted that the Ninth Circuit will likely support its position. “The Tenth and Second Circuit appeals courts, in separate actions, have ruled the extender statute applies to statutes of repose,” said Fairbanks, referring to a separate case in the Second Circuit.
NCUA has filed almost $10 billion of civil claims against dozens of Wall Street banks and subprime lenders for the sale of MBS to five failed corporate credit unions. Among the banks being sued by the federal regulator are: Goldman Sachs, JPMorgan Chase& Co., UBS Securities, Credit Suisse Securities, Barclays Capital, Wachovia Capital, as well as the defunct Bear Stearns and Washington Mutual, both now part of JPMorgan Chase.