Chicago Police Pension Sues Bank of America and U.S. Bancorp

April 13, 2012 ( – Chicago Policeman’s Annuity & Benefit Fund sued Bank of America and U.S. Bancorp for failing to protect investors in mortgage-backed securities. 

The complaint, which was filed in the U.S. District Court in New York alleges the banks regularly disregarded their responsibilities as trustee for Washington Mutual mortgage bonds and caused millions of dollars in losses for investors, reports Bloomberg.

According to the complaint, the banks knew loans backing the securities did not live up to their promised quality, mortgage loan files were incomplete and the banks failed to take action to enforce Washington Mutual’s obligation to repurchase defective loans.

Bloomberg reports that the pension fund is already part of a separate class-action suit against Bank of New York Mellon over its role as trustee for investors in Countrywide Financial mortgage bonds (see “Court Moves Forward Claims Over BNY Mellon Mortgage Bonds”).