United States: Second Circuit Reaffirms Its View That Extender Statutes Supersede Statutes Of Repose

The Financial Institutions Reform, Recovery, and Enforcement Act ("FIRREA") includes a so-called Extender Statute prescribing the limitations period for actions brought by the Federal Deposit Insurance Corporation ("FDIC") as conservator or receiver for a failed bank. The Housing and Economic Recovery Act of 2008 ("HERA") includes a materially identical provision governing the limitations period for actions brought by the Federal Housing Finance Agency ("FHFA") as conservator or receiver for government-sponsored entities within its regulatory purview, such as Fannie Mae and Freddie Mac. These Extender Statutes have been utilized by the FDIC and FHFA to pursue residential mortgage-backed securities ("RMBS") claims that otherwise would have been barred by various statutes of repose, and in 2013, in FHFA v. UBS, the Second Circuit held that the FHFA Extender Statute displaced the1 Securities Act's three-year statute of repose. However, in 2014, the Supreme Court held in CTS Corp. v. Waldburger that a Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA")2 provision preempting state statutes of limitations did not preempt state statutes of repose. Since then, RMBS defendants have invoked CTS to argue that the FDIC, FHFA, and similar Extender Statutes do not displace3 statutes of repose. The Fifth and Tenth Circuits have rejected such arguments (relying, in part, on UBS). In FDIC, as Receiver for Colonial Bank v. First Horizon Asset Sec., Inc., 2016 WL 2909338 (2d Cir. May 19, 2016) ("Colonial Bank"), a divided panel of the Second Circuit concluded that CTS did not undermine the rationale of UBS, and accordingly held that the FDIC Extender Statute supersedes the Securities Act's three-year statute of repose. Although the Colonial Bank decision did not result in a Circuit split that could have been helpful in obtaining Supreme Court review, the thoughtful dissent suggests that this issue may well generate ongoing judicial disagreement and find its way to the Supreme Court.


Both the FDIC and FHFA Extender Statutes provide that, with respect to tort claims (usually read to include securities claims as well) brought by the agency as conservator or receiver, the applicable "statute of limitations" shall be at least three years from the date of the agency's appointment as conservator or receiver.4  The Extender Statutes make no reference to potentially applicable statutes of repose.

In 2007, Colonial Bank, a federally-insured bank headquartered in Montgomery, Alabama, invested approximately $300 million in nine residential mortgage-backed securities ("RMBS"). Colonial suffered heavy losses on those RMBS, and on August 14, 2009, the Alabama State Banking Department closed Colonial and appointed the FDIC as receiver. On August 10, 2012, within three years of its appointment as receiver, the FDIC filed suit against the issuers and underwriters of the RMBS, alleging that the prospectus supplements misrepresented the creditworthiness of the loans backing the RMBS, and asserting claims under Sections 11 and 15 of the Securities Act. Defendants moved to dismiss the complaint as time-barred under the Securities Act's statute of repose — because the action was commenced more than three years after the RMBS had been offered to the public5 - arguing that the FDIC Extender Statute did not displace the Securities Act's statute of repose.

While that motion was pending, the Second Circuit decided UBS. The UBS Court held that the timeliness of Securities Act claims brought by FHFA was governed by the HERA Extender Statute alone, without regard to the Securities Act's statute of repose. The UBS Court specifically rejected the argument that the FHFA Extender Statute's use of the term "statute of limitations" meant that it left in place otherwise applicable statutes of repose.6  In this regard, although it acknowledged a difference between statutes of limitations and statutes of repose, the UBS Court noted that Congress and the federal courts often used the term "statute of limitations" to refer to both statutes of limitations and statutes of repose.7  Moreover, the UBS Court reasoned, the text of the Extender Statute indicated that Congress intended to preclude the application of any limitations periods other than as set forth in the statute itself, because the statute provides that "'the applicable statute of limitations with regard to any action brought by [FHFA] as conservator or receiver shall be' as set forth in the extender statute."8  In light of UBS, the Colonial Bank Defendants withdrew their Securities Act statute of repose argument.

The next year, the Supreme Court decided CTS. The issue in CTS was whether CERCLA § 9658, which provides for limited preemption of state statutes of limitations otherwise applicable to state-law toxic tort actions, also preempted state statutes of repose. The Supreme Court conceded that Congress sometimes used the term "statute of limitations" to refer to both statutes of limitations and statutes of repose, but held that features of § 9658 precluded reading it to extend to statutes of repose.9

Relying on CTS, the Colonial Bank Defendants moved for judgment on the pleadings, renewing their argument that the FDIC Extender Statute did not displace the Securities Act's statute of repose and that the action was therefore time-barred. The district court (Stanton, J.) agreed, and entered judgment for Defendants.10

The Colonial Bank Decision

A divided panel of the Second Circuit vacated the judgment. Judge Lynch, joined by Judge Carney, noted that Defendants made no attempt to distinguish the FDIC Extender Statute from the FHFA Extender Statute, and that the outcome was therefore controlled by UBS unless Defendants could show that its rationale had been explicitly or implicitly overruled by CTS.11  The majority concluded that Defendants had not made such a showing. As a threshold matter, the majority observed that CTS did not hold that a federal statute extending "statutes of limitation" must always be read to leave in place existing statutes of repose.12  The majority then catalogued the key ways that, in its view, CERCLA § 9658 differed from the Extender Statutes, leading the majority to conclude that CTS had "limited bearing" on the case at bar.13

Most significantly, the majority determined that the FDIC Extender Statute and § 9658 "are structured and worded in fundamentally different ways."14 Specifically, § 9658 "[did] not purport to create an entirely new statute of limitations framework for state toxic tort actions; instead, it provided a limited '[e]xception to State statutes.'"15  "By contrast, the Extender Statute establishes 'the applicable statute of limitations with regard to any action brought by the [FDIC] as conservator or receiver.'"16  The majority concluded that "this structure suggests that Congress intended the Extender Statute to supersede any and all other time limitations, including statutes of repose."17

Defendants argued that, like § 9658, the Extender Statute refers to statute of limitations in the singular, and that CTS had reasoned that this was an "'awkward way to mandate the pre-emption of two different time periods with two different purposes.'"18

The majority did not find this persuasive, noting that CERCLA refers to existing statute of limitations periods whereas the Extender Statute refers to a statute of limitations period newly created by the Extender Statute itself.19  Nor did the majority view the fact that the Extender Statute's limitations period is tied to accrual as supporting Defendants' position; rather, the majority took this to mean only that the Extender Statute is itself a statute of limitations, but irrelevant to whether it displaced otherwise applicable statutes of repose (a question already answered in the affirmative by UBS).20  The majority also contrasted the legislative histories of the two provisions. With respect to CERCLA § 9658, the Congressional report recommending a preemption amendment had distinguished between statutes of limitations and statutes of repose, but the statute as enacted did not. The majority observed that there was no legislative history to the FDIC Extender Statute making such a distinction, thereby undermining Defendants' argument that the Extender Statute's failure to refer to statutes of repose was of significance.21

Given these differences in the statutes' structure, wording, and histories, the majority was of the view that "much of CTS's reasoning is simply inapplicable to the Extender Statute."22  Accordingly, the majority "perceive[d] nothing in CTS that undercuts the UBS opinion's analysis of the Extender Statute."23  Following from that conclusion, the outcome in Colonial Bank was dictated by stare decisis.

Judge Parker dissented. He was of the view that the majority's reasoning failed to adequately account for the differences between statutes of limitation and statutes of repose as discussed in CTS, the holding of which he characterized as having "direct relevance to this case."24  He disagreed with the majority's premise that CTS's importance turned on whether § 9658 and the Extender Statute were "textually congruent." Rather, in Judge Parker's view, "[the importance of CTS] derives from its instruction on how to read extender statutes." In this regard, he observed that whereas UBS had interpreted "the statute of limitations" in the Extender Statute as evidence that Congress intended one limitations period to apply, CTS had "treated virtually identical language describing the covered period in the singular as evidence that Congress did not intend to alter 'two different time periods with two different purposes.'"25  Judge Parker concluded that when the FDIC Extender Statute was enacted in 1989 "Congress understood the distinction between statutes of limitations and statutes of repose,"26 and stressed that the Extender Statute does not reference statutes of repose yet "contains numerous references to the accrual of claims," which, the CTS Court emphasized, is relevant to statutes of limitations but not statutes of repose.27  Given the foregoing, Judge Parker concluded that the Extender Statute did not reflect the clear and unmistakable Congressional intent necessary to constitute an implied repeal of "a widely relied on and widely applied statute of repose."28

Looking Ahead

The FDIC, FHFA, and the National Credit Union Administration Board ("NCUA") have filed billions of dollars' worth of claims against RMBS issuers and underwriters that would have been barred by statutes of repose, but for the Extender Statutes as construed by various decisions. The CTS decision gave RMBS defendants encouragement that courts would revisit the issue and adopt a narrow reading of the term "statute of limitations" as used in the Extender Statutes, and their arguments have been successful in some district courts. With Colonial Bank, the Second Circuit has joined the Fifth and Tenth Circuits in holding that CTS is of limited, and ultimately not determinative, application to the Extender Statutes.29  The Supreme Court denied certiorari in both of those cases,30 and had the outcome in Colonial Bank been different, the issue would have been more strongly positioned for Supreme Court review. However, given the split panel in the Second Circuit, the fact that the Circuit courts are interpreting a very recent Supreme Court decision, and that the Ninth Circuit is currently considering the same issue in NCUA v. Wachovia Mortg. Tr. et al., No. 13-56620 (9th Cir. filed Sept. 17, 2013), the prospect of Supreme Court review remains real.

Special thanks to Shearman & Sterling LLP Associate James Lee for his contributions to this client publication.


1 FHFA v. UBS Americas Inc., 712 F.3d 136, 141-44 (2d Cir. 2013).

2 CTS Corp. v. Waldburger, 134 S.Ct. 2175, 2185-88 (2014).

3 See FDIC v. RBS Sec. Inc., 798 F.3d 244 (5th Cir. 2015) (FDIC Extender Statute held to displace Texas Securities Act statute of repose); Nat'l Credit Union Admin. Bd. v. Nomura Home Equity Loan, Inc., 764 F.3d 1199 (10th Cir. 2014) (NCUA Extender Statute, which is materially identical to the FDIC and FHFA Extender Statutes, held to displace Securities Act statute of repose).

4 See 12 U.S.C. § 1821(d)(14)(A) (FIRREA); 12 U.S.C. § 4617(b)(12)(A) (HERA).

5 See 15 U.S.C. § 77m.

6 See UBS, 712 F.3d at 142-43.

7 Id.

8 Id. at 143 (quoting 12 U.S.C. § 4617) (emphasis and brackets added by Court).

9 CTS, 134 S.Ct. at 2185-88.

10 FDIC, as Receiver for Colonial Bank v. Chase Mortgage Finance Corp., No. 12-cv-6166 (S.D.N.Y. Sep. 2, 2014).

11 Colonial Bank, at 9.

12 Id. at 10.

13 Id. at 4.

14 Id.

15 Id.

16 Id. at 5.

17 Colonial Bank, at 5.

18 Id. (quoting CTS, 134 S.Ct. at 2186-87).

19 Id. at 17.

20 Id. at 18.

21 See id. at 11.

22 Id. at 5.

23 Colonial Bank, at 6.

24 Id. at 8 (Parker, J. dissenting).

25 Id. at 10 (quoting CTS, 134 S.Ct. at 2186-87).

26 Id. at 9.

27 Id. at 11.

28 Id. at 11.

29 See FDIC v. RBS Sec. Inc., 798 F.3d 244; NCUA v. Nomura Home Equity Loan, Inc., 764 F.3d 1199.

30 RBS Sec. Inc. v. FDIC, 136 S. Ct. 1492, 1493 (2016); Nomura Home Equity Loan, Inc. v. Nat'l Credit Union Admin. Bd., 135 S. Ct. 949, 190 L. Ed. 2d 830 (2015).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.