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SCOTUS Declines Banks' Appeal Objecting to Lawsuit Brought by CUs
Wednesday, January 14, 2015 6:25 AM

The U.S. Supreme Court on Monday declined to hear an appeal filed by several banks objecting to the lawsuit filed against them by the National Credit Union Administration. The litigation against the lenders, including units of Royal Bank of Scotland and Wells Fargo & Co, will now go forward.

NCUA sued on behalf of two failed credit unions, U.S. Central Federal Credit Union and Western Corporate Federal Credit Union. The regulator has separate litigation pending against other defendants over securities sold to other failed credit unions.

The NCUA had placed several credit unions into conservatorship following losses they incurred when what were considered low-risk investments in 2006 and 2007 were significantly downgraded following the 2008 financial crisis. The regulator says the lenders made misrepresentations, in violation of federal securities laws, when selling the securities.