"Those who caused the problems in the wholesale credit unions should pay for the losses now being paid by retail credit unions," NCUA Chairman Debbie Matz said in a statement.

The agency, which said other suits will follow to recover billions in losses, alleges that the securities caused heavy losses at the five corporate credit unions that have been conserved and closed.

The collapse of five corporate credit unions caused the agency to design and implement a rescue plan that it estimates could cost credit unions approximately $20 billion. It involved borrowing money from the Treasury Department to set up the Temporary Corporate Credit Union Stabilization Fund. Natural person credit unions are paying for the rescue through assessments that are scheduled to continue through 2020. For this year, the agency has recommended that credit unions set aside between 20 and 25 basis points for 2011 assessments.

After taking over the corporate credit unions, the NCUA-held bonds that had once been worth $50 billion but are now worth considerably less. The agency sold the bonds in 13 guaranteed-note transactions that netted $28.3 billion.

The lawsuit against RBS involves approximately $565 million in claims stemming from U.S. Central Corporate Credit Union's purchase of bonds. The NCUA said in the suit that it isn't alleging fraud but is accusing RBS making "untrue statements and omissions," including not revealing that a material percentage of the borrowers whose mortgages made up the securities "were all but certain to become delinquent or default shortly after origination."

U.S. Central was the largest corporate credit union when the NCUA conserved it on March 20, 2009.

NCUA's litigation against J.P. Morgan involves approximately $278 million stemming from bonds purchased by U.S. Central and three other corporates that the agency conserved and closed: Members United Corporate Federal Credit Union, Southwest Corporate Federal Credit Union and Western Corporate Federal Credit Union.

As in its suit against RBS, the NCUA isn't alleging fraud but contends that J.P. Morgan made "untrue statements and omissions," including withholding information about a material percentage of the borrowers whose mortgages made up the securities.

The NCUA conserved WesCorp the same day it conserved U.S. Central. It conserved Members United and Southwest last September.

NCUA spokesman David Small said the agency has issued 986 subpoenas to companies involved in the mortgage process, including lenders, investment banks and rating agencies. He said the agency has retained two law firms with expertise in litigation– Washington-based Kellogg, Huber, Hansen, Todd, Evans & Figel and Chicago-based Korein Tillery– as well as local counsel in Kansas City, where the suits were filed.

When asked about the costs of the litigation, Small wrote in an email that "we are confident that this litigation is worth pursuing. It would be inappropriate to discuss legal fees or speculate about what they might be at this point in the process."

Other government agencies have sued investment banks over their actions in the sale of mortgage-backed securities.

The day after the NCUA filed its lawsuits, the Securities and Exchange Commission announced that J.P. Morgan had agreed to pay $153.6 million to end a suit alleging that the bank failed to tell investors that a hedge fund bet against securities they were buying. Two days later, the SEC announced that Morgan Keegan had agreed to pay $200 million to resolve a suit alleging that the firm mispriced mortgage-backed bonds in conservative funds.

Last July, Goldman Sachs agreed to pay $550 million to resolve an SEC lawsuit that was similar to the firm's suit against. J.P. Morgan.

Steven Bisker, an attorney who has worked extensively on credit union issues, said the substance of the NCUA's allegations appears to be solid, but there may be a question of the statute of limitations, since some of the transactions go back to 2005.

He also said that the case could come down to a question of how much due diligence the bond issuers, RBS and J.P. Morgan, are required to do and actually did on the mortgages that they didn't underwrite.

Banking industry analyst Bert Ely said it's unclear how the NCUA's allegations against RBS and J.P. Morgan will hold up in court or whether the investment banks will feel pressured to settle with the agency.

Ely said the NCUA could lose the case if it is proven in court that the executives at the corporates didn't perform the appropriate due diligence.

"The old rule is you don't buy what you don't understand, don't believe everything a salesman tells you and don't whine if you take a loss," he said.