NCUA’s payments to law firms in fees totaling more than $1 billion “is raising alarms among House GOP members” out of concern that the agency is overpaying for recovery agreements reached with Wall Street banks over corporate credit union securities, a Washington publication reported this week.
Politico reported today that NCUA is seeking to renegotiate terms of a 2009 contingency fee agreement with the law firms of Korein Tillery and Kellogg, Huber, Hansen, Todd, Evans & Figel PLLC, which NCUA has said possess the “requisite resources and securities and litigation expertise.”
The $1 billion in fees paid so far represents about one-fifth of the total $5.1 billion in legal recoveries that NCUA has realized so far. NCUA points out that net proceeds from recoveries are used to pay claims against the five failed corporate credit unions, including those of the Temporary Corporate Credit Union Stabilization Fund (which NCUA has proposed merging into the National Credit Union Share Insurance Fund in October).
NCUA has also stated that, without the contingency fee arrangement, “there would have been no legal investigation of potential claims, no litigation and no legal recoveries.”