WASHINGTON-House Financial Institutions and Consumer Credit Subcommittee Chairman Spencer Bachus (R-Ala.) said he is working to strike a balance between the immediate needs of the communities hit hardest by Hurricane Katrina and maintaining the safety and soundness of credit unions and other financial institutions. Regulators are asking all types of financial institutions to cash checks without the typical identification and excuse late fees and other normal charges in the wake of Hurricane Katrina, he noted, and many are, but how is this going to affect their CAMEL ratings? When should regulators begin to count the consequences of dealing with the immediate aftermath of the crisis? "Although we're appropriating the money, we're not making the decisions that need to be made," Bachus commented to reporters after speaking at NAFCU's Congressional Caucus. He said banks could be offered tax credits for some of their relief efforts, but, for credit unions, "I'm not sure how you'd do that," he said. One issue that Bachus has spearheaded is some sort of indemnification program for financial institutions for cashing bad checks when the normal protocols for identifying members cannot be followed. Representative Ginny Brown-Waite (R-Fla.) will be introducing legislation today or tomorrow, Bachus added, to indemnify financial institutions for fraudulent checks cashed following the massive storm. The bill includes backing from the Federal Reserve's surplus funds. Concerning insurance coverage for those homes and businesses damaged that were not within the flood plain and did not carry flood insurance, Bachus said there has to be some type of agreement that can be reached between the lender, owner and National Flood Insurance Program. He suggested possibly treating the property as if it were insured but backing out the premium that would have been paid if it had been. Then the owners and the lender would foot the bill for the premium. Bachus added that the Mississippi attorney general has also placed the burden of proof of wind versus water damage on the insurance companies, which, in his mind, could be the proper approach. Finally, he said financial institutions are being asked not to report non-, missed, and late payments, but when will that have to start up again for the people affected by Katrina? Reporting these things could serve only to further handicap some victims' recovery, Bachus noted. [email protected]