The bailout of the nation's failed savings and loans will be a windfall for lawyers, Federal Deposit Insurance Corp. Chairman L. William Seidman said Monday. Seidman said he expects to double the 40,000 lawsuits already under way against troubled thrifts and eventually to spend a half-billion dollars for outside legal counsel.
Speaking before the American Bankers Association's National Conference for Community Bankers, Seidman also criticized the credit union industry, saying it is expanding too quickly and overstating its financial strength.
Seidman, who also is chairman of the Resolution Trust Corp., the thrift bailout agency, used a barrage of statistics to defend the RTC against critics who say it has been slow to act.
The agency has taken over more than 350 thrifts in 37 states and advanced $11.4-billion to institutions to stem runs on deposits or replace brokered deposits.
Seidman said he has hired a staff of almost 1,900 people while merging his agency with the Federal Savings and Loan Insurance Corp. (FSLIC). The RTC is handling more than 40,000 lawsuits, "and that's just the beginning," he said. "We expect 80,000 by the end of the year."