On February 11, Bank of America, Merrill Lynch, and Countrywide (together, "the Banks") filed suit against the National Credit Union Administration Board ("NCUA") in its capacity as liquidating agent or conservator to six credit unions who purchased MBS issued by the Plaintiffs. The suit arises from a 2013 settlement agreement between NCUA and the Banks after the six credit unions' failure and subsequent liquidation or conservatorship. In the settlement agreement, NCUA agreed to use "good faith" and "best efforts" to obtain releases for the Banks in any actions that NCUA later pursued against third-parties involving the Banks' MBS. Plaintiffs specifically allege that because NCUA failed to seek a release of the third-party entity's indemnification claims against the Banks with respect to three settlements with two entities, the Banks were forced to pay to settle subsequent third-party indemnification demands. Plaintiffs also allege unjust enrichment, breach of the implied covenant of good faith and fair dealing, and violations of the Administrative Procedure Act., 5 U.S.C. §§ 702 and 706(2), due to the breaches.
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