Credit Union Agency Targets Big Banks In $2.4B MBS Suit

Law360, New York (September 24, 2013, 6:57 PM EDT) -- The National Credit Union Administration sued nine major investment banks Monday in New York federal court, alleging they deceived investors about the underlying value of $2.4 billion in residential mortgage-backed securities, resulting in the downfall of several credit unions.

The federal agency brought nine separate suits as liquidator for the Southwest Corporate Federal Credit Union and Members United Corporate Federal Credit Union, which collapsed during the subprime mortgage crisis. NCUA accused the banks of presenting risky pools of default-prone mortgage loans as AAA-grade securities, causing the...
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