WASHINGTON — The House and Senate are scheduled to vote today on the legislation ironed out over the weekend to create a $700 billion fund to buy illiquid assets from financial institutions, including credit unions.
The compromise measure was a victory for NCUA and the credit union lobbyists. NCUA, CUNA and NAFCU all worked to ensure that credit unions could participate in the program. And CUNA and NAFCU were successful in working with other financial institution lobbyists to prevent inclusion of a provision that would have allowed bankruptcy judges to rewrite mortgages.
To ensure that the program does not cost the government money, it includes a provision that if the government is losing money on the sales, the president must submit a plan to raise additional money from financial institutions to make up for those losses.
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"Credit unions comprise a significant component of the financial system," NCUA Chairman Michael E. Fryzel said, "My goal is to make certain that they remain safe, sound and well-positioned to deal with the uncertainties presented by problems in the broader markets."
NAFCU Director of Legislative Affairs Brad Thaler said that while "credit unions haven't caused this crisis, it's important to ensure they aren't disadvantaged under the final plan."
Although there have been criticisms of the plan by members of both parties, CUNA Vice President of Legislative Affairs Ryan Donovan predicted it would pass.
"Nobody loves this. But they wouldn't bring it to the floor, if they didn't think they had the votes to pass it."
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