WASHINGTON – Saying that credit unions "will be unfairly constrained in their ability to address the challenges that they now face through no fault of their own," NAFCU President Fred Becker today urged Treasury Secretary Henry Paulson to reverse yesterday's decision to not have the government buy illiquid assets.
In a letter to Paulson, Becker quoted from the law passed by Congress last month as stating that funds must be used to "purchase, and to make fund commitments to purchase, troubled assets from any financial institution." Becker added that using the money for anything else is an "egregious abuse" of taxpayer funds.
Becker also noted that NAFCU is concerned that some of the money that the government has injected into financial institutions through stock purchases has been used to buy other companies or enrich executives and shareholders.
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On Wednesday, Paulson announced that he wouldn't use any of the $700 billion allocated by Congress for the Troubled Assets Relief Program to buy bad assets because the money could be more effectively spent to inject capital into financial institutions and other firms through stock purchases.
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