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ALEXANDRIA, Va. — NCUA Chairman Michael E. Fryzel said 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 not something I believe in and do not regard that as something we are going to do,” he said in an interview with Credit Union Times. “The share insurance fund is for the protection of shares of individuals who have their funds in the credit unions. 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 had 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 when the regulatory system is restructured next year.Fryzel rejected that link.“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.Fryzel said he is “very frustrated” that Treasury Secretary Henry Paulson has not used TARP funds as Congress intended, and he would continue to try to persuade him to change his mind so credit unions have access to funds, which hopefully they won’t need.CUNA Executive Vice President and General Counsel Eric Richard said his association would continue to come up with another industry-based solution.“In our view, the important thing is for NCUA and credit unions to be as flexible as possible in considering courses of action. We will continue to pursue these issues with NCUA, the new administration and others. We are convinced, based on input from credit unions, that a movement-funded solution to credit union challenges-rather than a taxpayer-funded approach-makes the best sense,” he said in a statement.NAFCU President/CEO Fred Becker, whose association has strongly opposed using the share insurance fund to buy illiquid assets, praised Fryzel’s decision.“Our board met and discussed the possible use of the share insurance fund for a TARP-like program last September,” he said. “We have been and remain in opposition to the use of the share insurance for this purpose. We do, however, support the use of the Central Liquidity Facility for such a purpose, as has been requested by Chairman Fryzel. Finally, we thank Chairman Fryzel for his support on this issue.”Dealing with TARP has been one of the many policy balls that Fryzel has had to juggle, since he was sworn in on July 26.

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