Despite losing over and over and over again, banks facing securities claims by the Federal Housing Finance Agency and the National Credit Union Administration never stopped arguing that the government agencies didn’t meet their deadlines to sue. Now—after most of the banks have given up and settled—a judge has adopted their basic argument in an unrelated suit brought by the Federal Deposit Insurance Corporation in its capacity as receiver for now-defunct Colonial Bank.
In a 12-page decision issued on Tuesday, U.S. District Judge Louis Stanton in Manhattan dismissed claims by the FDIC that Royal Bank of Scotland Group plc, Deutsche Bank AG, Credit Suisse Group AG and other financial institutions duped Colonial into investing in toxic mortgage-backed securities. In a holding that’s sure to be cited in the FHFA litigation, Stanton ruled that the FDIC didn’t bring suit within the relevant statute of repose. (A statute of repose is like a statute of limitations, but it begins running earlier and is less easily tolled.)
