Though he also said part of the responsibility for the corporate credit unions woes can be laid at the feet of their executives. “There are serious questions whether those in charge were minding the store as closely as it needed to be,” he added.

The billions of dollars in losses sustained by the corporate credit unions have had a rippling effect throughout the credit union industry.

CUNA Executive Vice President and General Counsel Eric Richard praised the NCUA for going after the big investment case but predicted it could be very hard to win a case against them. “They are concentrating their resources on the right target. But it will be a difficult road ahead because these bankers have the resources to mount a strong defense and drag out the process,” he said.

According to a filing with the Securities and Exchange Commission, Goldman Sachs said the NCUA “has stated that it intends to pursue…on behalf of certain credit unions for which it acts as conservator” claims that when it offered certain securities, Goldman made “untrue statements of material facts and material omissions.”

Goldman recently lost a high profile battle with another federal regulator. Last July, the firm agreed to pay a $550 million civil penalty to the SEC to settle charges that it misled clients by selling mortgage securities designed by a hedge fund to benefit financially from the collapse of the housing market.

In 2009 and 2010 the NCUA conserved five corporate credit unions because of extensive losses from their investments in mortgage-backed securities: Constitution Corporate FCU, Members United Corporate FCU, Southwest Corporate FCU, U.S. Central Corporate FCU and Western Corporate FCU.

Many of the securities that the corporates bought were rated as AAA at the time they were purchased and are now valued as junk. The NCUA pooled the legacy assets of the conserved corporates, initially valued at about $50 billion, and placed them into a trust for securitization. The NCUA's sales of those securities have netted $24 billion.

Bert Ely, a consultant to the financial industry, said while going after the large investment banks may be appealing, it may not work as a legal strategy because the leaders of the corporate credit unions were supposed to be financially sophisticated.

“The argument that these poor [corporate] credit unions were taken advantage of, like unsophisticated widows and orphans may not fly. The corporates were set up to be specialists. There are credible issues about how knowledgeable they were,” he said.

Former NCUA Board Member Geoff Bacino disagreed and noted, “There are some pretty smart people who get hoodwinked, especially if the information is bad, and they are not being leveled with.”

The losses from the corporates have caused major financial ramifications for the whole industry and required the NCUA agency to ask Congress to set up a separate corporate stabilization fund with a loan from the Treasury department. The agency is levying assessments on credit unions to repay the loan. Last year, the agency levied a 12.4 basis point assessment and has given a preliminary projection of 20-25 basis points. Those are in addition to the assessments that the agency has levied to shore up the NCUSIF. Last year, that premium was 134.4 basis points and the agency's preliminary estimate for this year is between 0 and 10 basis points.

The problems of the corporates also caused the agency to make major changes in the rules governing them and in the structure of the system.

Last year, the agency approved a series of rules that take effect this year on the corporates.

The current corporate capital requirement of 4% will be replaced with three ratios: a 4% minimum leverage ratio, a 4% Tier 1 risk-based capital ratio, and an overall 8% total capital ratio with a risk-based element. These ratios are required to maintain “adequately capitalized” status; well- capitalized corporates would require higher capital standards.

The capital and retained earnings requirements will be implemented on a grandfathered basis, with the 4% Tier 1, risk-based ratio and 8% total risk-based capital ratio required on the one-year anniversary. The 4% leverage ratio isn't required of corporates until the final rule's third anniversary.