Regulators may sue banks to recover credit union funds

03/23/2011 | Wall Street Journal, The

Goldman Sachs, Bank of America, Citigroup and JPMorgan Chase are being faulted for selling more than $50 billion in mortgage-backed securities to five major wholesale credit unions that went on to fail during the housing market crash. The federal agency that acquired those unions at half that price says it may sue the banks unless they issue a full refund, a sign that regulators are becoming more aggressive in responding to the financial crisis. Wholesale credit unions invest deposits and provide check clearing services to small credit unions.

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