The National Credit Union Administration Board is suing another global bank over the sale of toxic residential mortgage-backed securities.
The agency filed suit against Barclays Capital, alleging the firm misrepresented the underlying quality of collateral backing $555 million in RMBS acquired by two credit unions that are now defunct, according to Law 360.
The regulator is suing on behalf of U.S. Central Federal Credit Union and Western Corporate Federal Credit Union in a Kansas federal court.
The case is similar to a lawsuit NCUA filed against UBS for its role in the sale of RMBS that later caused two credit unions to go belly up after the financial crisis.
The credit unions, Western Corporate Federal Credit Union (WesCorp.) and U.S. Central Federal Credit Union, failed when numerous homeowners defaulted on mortgages backing RMBS deals they invested in.
NCUA is suing in both cases as a liquidating agent for the credit unions.
