The National Credit Union Administration has sued Wells Fargo & Co., alleging the San Francisco lender contributed to the failure of five credit unions.
NCUA on Tuesday said it brought the suit against Wells Fargo in federal court on behalf of five failed corporate credit unions. The regulator alleges that Wells Fargo failed to fulfill its duties as trustee for 27 residential mortgage-backed securities trusts, and that the credit unions collapsed in part because they bought $2.4 billion in faulty residential mortgage-backed securities from the trusts between 2004 and 2007.
The NCUA said the damages it will seek will be determined at trial.
“We strongly disagree that Wells Fargo is in any way responsible for any losses incurred on these transactions,” said Trisha Schultz, a spokeswoman for the bank.