WASHINGTON — NCUA Chairman Michael E. Fryzel said the House bill passed today on illiquid asset purchases and deposit insurance will strengthen his agency's ability to regulate during the current economic downturn.
"I firmly believe that these actions will add important dimensions of financial and regulatory assistance to NCUA, credit unions and the entire financial services industry. I will move forward expeditiously and with a sense of purpose as we employ the new tools at our disposal," he said in a statement.
Under the measure, which the House passed 263-171, the amount of deposit insured by the NCUA's Share Insurance Fund will increase from $100,000 to $250,000 through December 31, 2009 and the NCUA will be consulted during the formulation of policies for the purchases of illiquid assets by the Treasury Department from credit unions and banks.
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The bill, combined with Congress' earlier action to raise the cap on the Central Liquidity Fund, "will assist NCUA in mitigating some of the current and potential difficulties facing the credit union industry." Fryzel said.
CUNA President Dan Mica said the vote, which follows the Senate's approval of the measure on Wednesday, "sends a vital message to credit union members and consumers that their federally-insured deposits in credit unions remain safe."
NAFCU President Fred Becker said that while credit unions did not cause the problems that the bill addresses, it was important that "credit unions are not disadvantaged under this measure, and we thank the leaders in both the House and Senate and in the administration for recognizing and addressing that concern."
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