March 14, 2018 / 9:51 PM / 9 months ago

Banks urge dismissal of FDIC lawsuit over mortgage bond losses

Citibank, Bank of New York Mellon and U.S. Bank have asked a federal judge in Manhattan to dismiss lawsuits by the Federal Deposit Insurance Corp accusing them of failing their duties as trustees for mortgage-backed bonds that suffered heavy losses during the foreclosure crisis.

In a motion on Tuesday, the banks said they were not liable for the wrongdoing the FDIC had alleged because as trustees, they only had “specified ministerial” duties and were not required to investigate suspected problems with the bonds.

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