The National Credit Union Administration will continue attempting to renegotiate legal fees that resulted from its efforts to make recoveries from large banks that sold faulty residential mortgage-backed securities to five corporate credit unions at the start of the financial crisis.
Outside counsel has received, to date, more than $1.1 billion in legal fees. But so far the regulator has not been successful in amending the agreements.
In an email, NCUA Chairman J. Mark McWatters said neither he nor board member Rick Metsger were involved in either vetting outside counsel or negotiating the terms of the corporate credit union related-legal services agreements. He said the NCUA should continue its efforts to negotiate a "fair and transparent modification" of the agreements. "In my view, these fees are regrettably excessive, yet our good faith efforts to reach an equitable accord with the recipient law firms have not succeeded," he said.
The NCUA has obtained $5.1 billion in legal recoveries related to the sale of faulty securities to corporate credit unions. Most recently, the agency announced in May that it received $400 million from Credit Suisse Group AG.
The NCUA in July said it plans to close its temporary stabilization fund, in part because of the recoveries it has made.