WASHINGTON – The Senate Banking Committee this morning endorsed a bill which would vastly expand the borrowing capacity of NCUA and allow the agency to stretch out the recapitalization of the National CU Share Insurance Fund to as long as five years in order to help pay the growing costs of the corporate credit union bailout.
The provisions were attached to a credit card accountability bill that would bar certain credit card practice, like retroactive interest rate hikes, double-cycle billing and the allocation of payments to the lowest-rate charges.
Also attached was a provision that would triple the borrowing capacity for the FDIC to $100 billion in order to deal with increasing bank failures.
The credit union provisions would increase the borrowing capacity of NCUSIF from the $100 million set all the way back in 1971, to $6 billion, with an additional $18 billion allowed on an emergency basis. It would also allow NCUA to stretch out the replenishment of the insurance fund--required by the $5.9 billion corporate bailout--from the current one year required by law, to five years.
Republican Sen. Michael Crapo, who developed the FDIC and NCUA provisions, said he will continue to try to add the two to any related bill moving through the Senate, as lawmakers grapple with surging losses among banks and credit unions. "I just think we should insert this language anywhere we can," said Idaho senator.
Democrat Chris Dodd, the chairman of the banking committee, agreed that the FDIC and NCUA provisions are important ones. "There's a sense of urgency before us," said Dodd, indicating the bipartisan support for increased funding for the two regulators.
The bill will now go the Senate floor for consideration of all senators.
The bill is one of several being considered by Congress to help mitigate the impact of the corporate bailout.
