NAFCU wrote a key senator today saying it opposes the current version of a measure to let bankruptcy judges rewrite the terms of mortgages because it doesn't deal with the impact on Private Mortgage Insurance contracts and on work-out plans for subordinate liens.

"Without this information, the NAFCU Board of Directors does not believe that they can fully and fairly evaluate how this legislation will impact credit unions. Consequently and very unfortunately, at this juncture, we cannot 'support and defend,' as your staff has requested of us," NAFCU President Fred Becker wrote Sen. Richard Durbin (D-Illinois).

Becker said they continue to endorse a compromise that would only allow subprime and non-traditional mortgage loans to be rewritten.

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

"In fact, because we stayed at the table, we believe we are very close to acceptable resolutions on the two issues mentioned by NAFCU in its letter to Sen. Durbin. NAFCU would know that if they had not left the talks. The fact is, however, no deal has been made. CUNA will continue to work with Sen. Durbin and Senate leaders to develop a legislative approach that limits negative impact on credit unions. This is not the time to merely walk away; there is too much at stake for credit unions," Mica said in a statement.

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