ALEXANDRIA, Va. — NCUA Chairman Michael E. Fryzel said yesterday that any program to buy bad mortgages from credit unions should not be financed by the NCUSIF, but by the Treasury Department's Troubled Asset Relief Program.
"That is something I do not believe in and do not regard that as something we are going to do," he said in an interview with Credit Union Times. "There are almost 90 million people in this country who have their money in credit unions, and that fund is there to protect their deposits. It's not for the use of purchasing troubled assets."
CUNA has advocated such a program, saying that having credit unions take care of their own problems, rather than relying on federal funds, could help persuade Congress that credit unions shouldn't be lumped in with other financial institutions under one regulator.
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Fryzel rejected that connection.
"When Congress changes the regulatory structure next year, which I believe they will, if they carve out an exemption for credit unions, they will do so because they believe that the regulation of credit unions has been the type of regulation that should be the model for other financial institutions," he said.
CUNA Executive Vice President and General Counsel Eric Richard said his group will continue to work with the NCUA and others to find an industry-based solution to the problem.
NAFCU President/CEO Fred Becker, whose group opposed CUNA's approach, praised Fryzel's decision and the NCUA's decision to tap the Central Liquidity Facility as a source for additional loans to credit unions.
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