Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WASHINGTON-Congressman Paul Kanjorski (D-Pa.) introduced and then withdrew-as part of his strategy to get the issue on the table-an amendment (CU Times, April 16) to H.R. 1375, the Financial Services Regulatory Relief Act to strike the section of the bill permitting privately insured credit unions to join the Federal Home Loan Bank System. Kanjorski’s comments were not available as of press time for Credit Union Times April 16 issue. During the House Financial Services Subcommittee on Financial Institutions and Consumer Credit mark up of H.R. 1375, Kanjorski, a strong credit union supporter, acknowledged that the issue “has generated considerable debate and emotion in the credit union movement,” and that he hoped the issue will be raised during the full committee mark up. He explained that he had several concerns about privately insured credit unions including congressional policy that membership should only include federally insured financial institutions; the undermining of Gramm-Leach-Bliley; encouraging credit unions to escape federal regulation; failure of these credit unions would cause systemic problems for all credit unions; previous experiences with private insurance, such as RISDIC; and the non-enforcement of consumer protection provisions in the Federal Deposit Insurance Corp. Improvement Act. Kanjorski also raised concerns about the private insurance system during last year’s full committee mark up of the regulatory relief bill. “I have strong philosophical concerns regarding this section because it contains nothing to create genuine federal supervision over private deposit insurance,” Kanjorski remarked. “Should the private insurance system fail, it would likely cause great adversity and turmoil for all credit unions, as well as potentially severe implications for the Federal Home Loan Bank System.” House Financial Services Financial Institutions and Consumer Credit Subcommittee Chairman Spencer Bachus (R-Ala.) reminded the lawmakers that there are currently nonfederally insured members of the FHLBs. Kanjorski noted that some credit unions that have converted to private insurance have done so to avoid Prompt Corrective Action requirements and the member business lending cap. He pointed out that flight from the federal charter and its deposit insurance were the first signals of the thrift crisis two decades ago. He also brought up NAFCU, Federal Reserve Board Chairman Alan Greenspan, and the Consumer Federation of America’s objections to private insurance. In addition, the NCUA Board has let its strong support for federal insurance be known. “Nonetheless, I will withdraw my amendment at this time with the understanding that we will continue to examine this issue and work toward a compromise before consideration of this bill by the full committee,” the lawmaker concluded. A full committee mark up is expected to come shortly after the spring recess, ending April 28. [email protected]

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?


Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times
Live Chat

Copyright © 2022 ALM Media Properties, LLC. All Rights Reserved.