NAFCU wrote a key senator today saying it opposes the currentversion of a measure to let bankruptcy judges rewrite the terms ofmortgages because it doesn't deal with the impact on PrivateMortgage Insurance contracts and on work-out plans for subordinateliens.

"Without this information, the NAFCU Board of Directors does notbelieve that they can fully and fairly evaluate how thislegislation will impact credit unions. Consequently and veryunfortunately, at this juncture, we cannot 'support and defend,' asyour staff has requested of us," NAFCU President Fred Becker wroteSen. Richard Durbin (D-Illinois).

Becker said they continue to endorse a compromise that wouldonly allow subprime and non-traditional mortgage loans to berewritten.

CUNA President Dan Mica criticized the letter and said itreflects the fact that NAFCU hasn't been involved in thenegotiations with lawmakers.

"In fact, because we stayed at the table, we believe we are veryclose to acceptable resolutions on the two issues mentioned byNAFCU in its letter to Sen. Durbin. NAFCU would know that if theyhad not left the talks. The fact is, however, no deal has beenmade. CUNA will continue to work with Sen. Durbin and Senateleaders to develop a legislative approach that limits negativeimpact on credit unions. This is not the time to merely walk away;there is too much at stake for credit unions," Mica said in astatement.

The House passed a bill what includes this provision, known ascramdown, but the measure is still the subject of intensenegotiations in the Senate because there are currently not the 60votes needed to pass it.