July 10, 2013 / 11:00 PM / 6 years ago

Barclays wins dismissal of credit union regulator's lawsuit

(Reuters) - Barclays Plc (BARC.L) on Wednesday won the dismissal of a U.S. credit union regulator’s lawsuit over the sale of more than $555 million of mortgage-backed securities to two failed corporate credit unions.

A woman sits in her mobility scooter outside a Barclays Bank in Leicester, central England April 24, 2013. REUTERS/Darren Staples

U.S. District Judge John Lungstrum in Kansas City, Kansas said the National Credit Union Administration waited too long by not filing its complaint until September 25, 2012.

He said the deadline was March 20, 2012, three years after the NCUA had been named conservator of the U.S. Central Federal Credit Union and the Western Corporate Federal Credit Union.

The lawsuit accused Barclays and other defendants of making misleading statements about 12 residential mortgage-backed securities that the credit unions bought between October 2006 and June 2007.

It is one of 10 lawsuits that the NCUA has been pursuing on behalf of five credit unions it seized in 2009 and 2010 over losses they suffered on $14.1 billion of mortgage-backed securities amid a crumbling housing market.

Wholesale credit unions suffered more pain than retail counterparts because they had more leeway on how to invest.

“We respectfully disagree with the decision,” NCUA spokesman John Fairbanks said. “We will continue to vigorously pursue our claims against the parties that sold the faulty securities to corporate credit unions.”

Fairbanks had no immediate comment on whether the NCUA might appeal.

In April, Lungstrum also cited a statute of limitations in dismissing part of the NCUA’s case against Credit Suisse Group AG CSGN.VX. Lungstrum affirmed that ruling on Wednesday.

Half of the securities at issue in the various lawsuits were sold by JPMorgan Chase & Co (JPM.N), or Bear Stearns Cos or Washington Mutual Inc, both of which JPMorgan bought in 2008.

Banks that have settled with the NCUA include Bank of America Corp (BAC.N), Citigroup Inc (C.N), Deutsche Bank AG (DBKGn.DE) (DB.N) and HSBC Holdings Plc (HSBA.L) HBC.N.

The cases are National Credit Union Administration Board v. Barclays Capital Inc et al, U.S. District Court, District of Kansas, No. 12-02631; and National Credit Union Administration Board v. Credit Suisse Securities (USA) LLC et al in the same court, No. 12-02648.

Reporting by Jonathan Stempel in New York; Editing by David Gregorio

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