Regulators blame banks for credit union losses: WSJ
(Reuters) - U.S. regulators are blaming some of the biggest Wall Street firms for the collapse of five wholesale credit unions and are threatening to sue the banks to recover up to $50 billion of soured investments, the Wall Street Journal reported on Wednesday.
The National Credit Union Administration accused Goldman Sachs <GS.N>, Bank of America's <BAC.N> Merrill Lynch unit, Citigroup <C.N> and JPMorgan <JPM.N>, of misrepresenting risks of mortgage-backed securities to the wholesale credit unions, the Journal said, citing people familiar with the matter.
JPMorgan and Citigroup declined to comment. Spokespeople for Goldman and Bank of America did not immediately respond to requests for comment.
The five wholesale credit unions heavily invested toxic mortgage-backed bonds, which passed into the hands of the NCUA after it seized the unions in 2009 and 2010. Those bonds are worth about $25 billion, half their face value, the paper said.
The NCUA were not immediately available for comments.
(Reporting by Arup Roychoudhury; Editing by Louise Heavens and Derek Caney)