Appeals Court Upholds Lower Court Decision to Block NCUA's Lawsuit

The U.S. Court of Appeals for the Second Circuit has upheld a district judge’s decision to bar the National Credit Union Administration from bringing legacy breach of fiduciary duty claims on residential mortgage-backed securities certificates the agency inherited from the failure of five corporate credit unions.

The court found that NCUA gave up its claim over the trust certificates after the agency entered into an indenture agreement with Bank of New York Mellon.

The panel affirmed an order from Southern District Judge Katherine Forrest that dismissed a lawsuit filed by the National Credit Union Administration for lack of standing. The panel also affirmed Forrest’s decision to deny the agency a chance to rework its second amended complaint.

Read the decision.

Read the story in New York Law Journal.