A New York federal judge on Thursday ordered the banks to halt their lawsuit against the federal government over the housing crisis and seek more time to defend themselves against a lawsuit brought by students.
Lawyers for JPMorgan Chase & Co., the nation’s largest bank by assets, sought to stop the suit in a motion filed Thursday in the U.S. District Court for the Northern District of California.
The plaintiffs are students who took out student loans to finance their college education and lost their jobs.
The lawsuit was filed in the wake of the 2008-2009 financial crisis and has been on hold in the courts, even though the bank and a coalition of students’ groups have been pushing for it to be resolved.
In the motion, JPMorgan Chase’s lawyer, William M. Dittmar, said that students are “the only beneficiaries of the financial crisis.”
He said the lawsuit is about “the right to a reasonable level of protection against the financial burdens of a bankrupt government.”JPMorgan Chase, the nation�s largest bank, has been under a court order since last year to file a $40.5 billion lawsuit against President Donald Trump and his administration.
That suit alleges that Trump and top economic adviser Gary Cohn defrauded student loan borrowers out of $5.3 trillion by manipulating interest rates and lending rates in an effort to stimulate the economy.
In its motion to stop a lawsuit filed by students, JPMorgan said that while the lawsuit “is not frivolous, it is the only one on which there is any factual basis to seek relief.”
The lawsuit is part of a larger class-action lawsuit by the federal student loan relief fund and has cost more than $4.5 trillion since its inception in 2005.