Financial institutions with assets of less then $50 billion-which includes all credit unions-wouldn't have to pay into a fund aimed at rescuing large companies deemed "too big to fail," as a result of an amendment passed by the House Financial Services Committee yesterday.
The amendment, which was approved 52-17 despite the opposition of Chairman Barney Frank (D-Mass.), is part of a bill that establishes mechanisms to curb systemic risk. The amendment to raise the threshold to $50 billion-the original bill had it at $10 billion-was sponsored by Rep. Brad Sherman (D-Calif.).
The bill, which the full committee is scheduled to vote on after the Thanksgiving recess and the full House is scheduled to take up during the second week of December, creates a Stabilization Resolution Fund, administered by the FDIC. It also includes a provision allowing Congress to request an audit of all of the operations of the Federal Reserve, including its decisions on monetary policy. That amendment passed 43-26, also despite Frank's opposition.
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The NCUA as well as CUNA and NAFCU lobbied for the carve out for credit unions.
CUNA President/CEO Dan Mica said in a statement that the lopsided majority for the amendment shows that lawmakers believed "that credit unions should never have been included under this requirement in the first place."
NAFCU President/CEO Fred Becker in a statement praised supporters of the amendment "who recognized that credit unions should not have to pay for the mismanagement of large financial companies."
The House is much further along in its consideration of legislation to restructure the regulation of financial services than the Senate. The Senate Banking Committee began its discussion of legislation on the issue by Chairman Christopher Dodd (D-Conn.) yesterday. That panel is scheduled to begin marking up the bill the week after Thanksgiving.
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