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(Adds Bank of America declines to comment)
By Emily Stephenson
WASHINGTON, Dec 17 (Reuters) - The U.S. credit unionregulator said on Wednesday it filed a lawsuit against U.S. Bank and Bank of America over mortgage securitiessold in the years leading up to the financial crisis.
The National Credit Union Administration (NCUA) said thebanks broke state and federal laws by failing their duties astrustees for 99 residential mortgage-backed securities trusts.
The banks sold $5.8 billion in securities to five corporatecredit unions that later failed after the products lost value.The regulator accused U.S. Bank and Bank of America of knowingabout defects in the mortgage loans but not providing requirednotices to the investors.
"U.S. Bank and Bank of America had obligations under federaland state law, and they failed to live up to those obligations,"NCUA Chairman Debbie Matz said in a statement.
"Our legal efforts are aimed at promoting accountabilitywithin the financial system," she said.
Spokesmen for U.S. Bank and Bank of America declined tocomment on the lawsuit.
U.S. regulators have been cracking down on banks for theirbehavior during the years leading to the 2007-2009 financialcrisis, when mortgages went bad and investors in securities tiedto those loans lost money.
The credit union regulator last year filed nine lawsuitsagainst banks, including Morgan Stanley and Barclays, over mortgage securities sold to some of the samecorporate credit unions.
Corporate credit unions are owned by and provide services toconsumer-owned credit unions.
The complaint was filed in the U.S. District Court for theSouthern District of New York. (Reporting by Emily Stephenson and Aruna Viswanatha; Editing bySusan Heavey and Richard Chang)
