Reactions to the $800 million in lawsuits filed June 20 by NCUA against J.P. Morgan Securities and RBS Securities over what NCUA claims were fraudulently packaged mortgage-backed securities heated up as experts debated exactly what is going on and what the litigation means to credit unions.
Key to the situation is that it is dynamic. The NCUA confirmed in an email to Credit Union Times that more suits against other big Wall Street banks can be expected. Lawrence Remmel, an attorney with Pryor Cashman in New York, indicated he had heard as many as 15 banks might be sued by the NCUA.
Other experts suggested that in all the NCUA will be suing for as much as $8 billion to $10 billion, about the same as the net loss incurred by the credit union system from bad investments in MBS.
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