The National Credit Union Administration is suing and 11 other international banks for alleged violations of federal and state anti-trust laws.

Their alleged manipulation resulted in the loss of income from investments and other assets held by five failed corporate credit unions, including US Central, WesCorp, Members United, Southwest and Constitution. 

The NCUA said the banks are accused of giving false interest-rate information through the LIBOR rate-setting process “to benefit their investments that were tied to LIBOR, to reduce their borrowing costs, to deceive the marketplace as to the true state of their creditworthiness, and to deprive investors of the interest rate payments to which they were entitled”.

“We have a responsibility to pursue recoveries through every available avenue against those who caused billions of dollars in losses to credit unions. Some firms were manipulating international interest rates in a way that cost the five corporates to lose millions of dollars. Just as we are doing in our other suits, we are seeking to hold responsible parties accountable for their actions," said NCUA board chairman Debbie Matz.

The false information created the impression the defendant banks were borrowing money at a lower interest rate than they were actually paying, the NCUA said.

Banks involved in the LIBOR manipulation have been under investigation by authorities in the US and the UK. The investigating authorities have so far collected approximately $2.5 billion in penalties from three firms, UBS, the Royal Bank of Scotland and Barclays.