A US judge has rejected HSBC's bid to dismiss a US lawsuit, claiming that its failure to perform its duties as trustee for $2.37bn of residential mortgage-backed securities contributed to the downfall of five federal credit unions. This was despite the fact that most of the debt has been re-securitised and that the new trustee had refused to sue HSBC on the National Credit Union Administration (NCUA)'s behalf. This lawsuit is one of many in which the NCUA are seeking to recover investment losses that led to the 2009 and 2010 failures of US Central, Western Corporate, Constitution Corporate, Members United Corporate and Southwest Corporate credit unions. The case against HSBC began when it failed to honour an agreement with the Federal Home Loan Bank (FHLB) to pay $48m (£28m) into a fund set up by FHB.
A US judge has rejected HSBC's bid to dismiss a US lawsuit, claiming that its failure to perform its duties as trustee for $2.37bn of residential mortgage-backed securities contributed to the downfall of five federal credit unions. This was despite the fact that most of the debt has been re-securitised and that the new trustee had refused to sue HSBC on the National Credit Union Administration (NCUA)'s behalf. This lawsuit is one of many in which the NCUA are seeking to recover investment losses that led to the 2009 and 2010 failures of US Central, Western Corporate, Constitution Corporate, Members United Corporate and Southwest Corporate credit unions. HSBC has declined to comment.