ALEXANDRIA, Va.–NCUA said it will not be commenting following revelations earlier this week that a member of Congress has contacted the agency regarding more than $1 billion in attorney’s fees the agency has paid to date as part of settlements related to the corporate CU crisis of a decade ago.
In addition, NCUA told CUToday.info it will also not be commenting further on whether it will continue to seek a renegotiation of the contingency fee agreement it has with two law firms representing it as it seeks recoveries from banks and brokerages over failed investments purchased by the corporate CUs.
As CUToday.info reported here, NCUA has paid $1.1-billion in contingency fees to St. Louis-based Korein Tillery and Washington-based Kellogg, Huber, Hansen, Todd, Evans & Figel, which have represented NCUA in 26 lawsuits filed against various entities seeking damages for failed investments. To date, NCUA has recovered more than $5 billion after placing five corporates into conservatorship a decade ago.
As CUToday.info also reported, following a story first broken by Politico, Rep. Ann Wagner (R-MO) has sent a letter to NCUA Chairman Mark McWatters stating “The payment of over one billion dollars in legal fees to private counsel raises serious questions about the propriety of the NCUA’s legal fee arrangements, including whether the arrangements were in the best interest of the NCUA.”
Wagner chairs the House Financial Services subcommittee on oversight.
NCUA Chairman J. Mark McWatters, who is an attorney, told Politico that the agency had met at least once with the law firms in an attempt to renegotiate the terms of the agreement, which was executed on Sept. 1, 2009. Its outreach was rebuffed, McWatters said.
CUToday.info will continue to follow the story.