“The banks are now going to have to face up to the reality of a significant liability.”

The Supreme Court has rebuffed an effort by some of the country’s largest banks - including Wells Fargo, Credit Suisse and Deutsche Bank -  to halt several financial crisis-era lawsuits filed by regulators. The banks are contesting that the suit, which can result in tens of billions of dollars in legal costs, were not filed in a timely manner. Instead, the case was returned to the Federal District Court for the Southern District of New York.

“We’re disappointed and hope the court decides to review this important legal issue in a later case,” Robert J. Giuffra Jr., of Sullivan & Cromwell and the lead lawyer for the banks, said.

The petition at issue involved Colonial Bank of Montgomery, AL, which failed in 2009 in one of the largest financial company collapses in American history. In August 2012, the FDIC sued the banks that issued or underwrote the $300 million in mortgage-backed securities (MBS’s) that Colonial bought in 2007 that contributed to its failure. Regulators said the disclosures on the securities contained false information or misrepresented the health of the underlying mortgages.

Lawyers for the banks have estimated that damages related to about $37.5 billion in securities are at stake in at least a dozen pending suits stemming from the financial crisis. They have argued that the suits should be barred based on the Securities Act deadline. The cases were brought by the FDIC, the FHFA and the NCUA.

The court’s latest decision will probably end efforts to end the pending cases with one “killer shot,” said Donald Hawthorne, of Axinn, Veltrop & Harkrider, who has followed the litigation.

“The banks are now going to have to face up to the reality of a significant liability.”