Federally insured credit unions could potentially receive arebate on corporate assessments, according to a Wednesday release fromthe NCUA. However, the final tally won't come until 2021, theregulator cautioned.

The net remaining stabilization fund projected assessment rangenow runs from negative $1.9 billion to negative $400 million,compared to the negative $200 million to $1.6 billion projectionfrom the second quarter of 2013, the NCUA said. As long as bothends of the range remain negative, there will likely be no need forfuture assessments, the agency added.

The net proceeds from the $1.4 billion JPMorgan Chase settlementin November 2013 and the continued improvement in the performanceof the legacy assets underlying the NCUA Guaranteed Notes (NGN)program during the third quarter of 2013 caused the decline in theassessment range.

“Our legal team is diligently pursuing our claims against theWall Street securities firms who sold faulty securities to fivecorporate credit unions, causing them to fail and triggering acrisis in the system,” NCUA Board Chairman Debbie Matz said. “Thathard work is paying off, and we will continue our efforts to holdaccountable those who helped precipitate the crisis.”

NCUA Public Affairs Specialist John Fairbanks would not commentwhen asked for the net amount of the JPMorgan Chase settlement thatwas applied to the corporate stabilization fund. The NCUA enteredinto a contingency agreement with outside attorneys when itinitially filed lawsuits against Wall Street investment firms torecover losses from corporate investments.

In October 2012, Rep. Darrel Issa (R-Calif.) challenged thecontingency agreement, which he said violated an executiveorder prohibiting federal agencies from the agreements.

In an Oct. 16 letter to then-NCUA Inspector General WilliamDeSarno, the California lawmaker was critical of the NCUA'scontingency arrangements with two law firms, the Washington-basedKellogg Huber and the Chicago-based Korein Tillery. The agreementsstated the firms would collect 25% of all claims recovered from thebank plaintiffs, Issa said.

At the time, law firms had received more than $40 million from$170 million in settlements with Citigroup, Deutsche BankSecurities and HSBC. The remaining $127.25 million was applied tothe corporate stabilization fund.

In February 2013, DeSarno told Issa it supported the NCUA'sposition that the agency was acting as conservator when it pursuedthe damages in court, and was no longer functioning as a governmentagency.

DeSarno, who retired from the NCUA June 1, 2013, also said hethought the 25% contingency agreement was reasonable.

If the 25% contingency fee arrangement still holds, lawfirmswould receive as much as $350 million from the JPMorgansettlement.

Following the NCUA's $1 billion repayment to Treasury inDecember 2013, the agency must still repay $2.9 billion inoutstanding Treasury borrowings before any remaining StabilizationFund distributions can be legally made to credit unions. As aresult, the NCUA said, any potential repayment to credit unions isnot likely to occur prior to expiration of the Stabilization Fundin 2021.

The assessment range is generated using legacy asset cash flowsprojected by the international asset management firm BlackRock.While NCUA expects to receive these legacy asset cash flows overtime, they have not been realized, so future Stabilization Fundranges could also vary significantly from current projections.