Monday, February 11, 2013

NCUA Responds to Rep. Issa's Request on Hiring of Outside Counsel

In a twelve-page letter, NCUA's Inspector General (IG) responded on February 6 to Rep. Issa's inquiry about hiring outside counsel on a contingency fee arrangement to handle certain financial security-related litigation. See my blog post of October 31, 2012 to read Rep. Issa's letter.

Rep. Issa requested that the IG look at whether the contingency fee arrangements were the best possible alternative. In a heavily redacted analysis, the IG concluded that the amount paid to outside counsel as of October 31, 2012 appears to be reasonable and not unnecessarily high.

With regard to Issa's question as to whether Executive Order (E.O.) 13433 applied to NCUA, the IG concluded that NCUA did not violate E.O. 13433 by entering into a contingency fee arrangement when hiring outside counsel. The IG wrote that the E.O. "does not prohibit NCUA from entering into contingency fee arrangements when it is serving in the capacity as Conservator or as Liquidating Agent." The IG stated that NCUA is stepping into the shoes of the credit union and "is no longer functioning as a government agency."

The IG letter also noted that in hiring the two law firms the agency complied substantively with the "Procedures for Hiring Outside Counsel," although it did not adhere completely to the its procedures. The letter notes that NCUA only interviewed two law firms, when the agency should have contacted three before engaging representation. The IG further concluded that political affiliation had no bearing on the law firms hired.

Read the letter.


  1. Alot of words, redactions and lawyer isms that add up to one tru thing...NCUA did not protect the taxpayer or credit unions.
    Supervision of corporates that were leveraged as much as big banks and buying garbage.
    Contingency lawsuits awarded with no true competition to a crony friend and at possible/probable higher cost to credit unions and taxpayers.
    Credit unions to Issa- deal with this agency please.

  2. Billions in guaranteed notes (guaranteed by Treausry/taxpayer) and billions more borrowed directly from Treasury/taxpayer.
    A taxpayer bailout for a NON tax paying agency/industry.
    And, they can't even file suit on behalf of the taxpayer in the most appropriate way?
    You can't make this crap up.



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