Congress Plans Hurricane Relief ForFinancial Services
WASHINGTON - (09/14/05) -- The House Financial ServicesCommittee is expected to endorse several steps Wednesday that willhelp ease the way for credit unions and banks to expand theirdisaster relief efforts for victims of Hurricane Katrina. Among theprovisions lawmakers are expected to include in a relief bill forfinancial service providers is indemnification against losses forcheck fraud as hundreds of credit unions and banks have loosenedtheir identification requirements for check cashing in the wake ofthe massive storm. The credit union lobby is expected to supportthis measure. "We don't want our members to be penalized for doingthe right thing," one lobbyist told The Credit Union Journal.Another provision, according to drafts of a bill obtained by TheCredit Union Journal, would allow federally insured institutions tomake so-called fresh start loans, allowing borrowers in thedisaster area to defer loan accrual, a practice that is currentlybarred. Lawmakers are also considering a waiver of cash deliveryand wire fees charged by the Federal Reserve; and a temporaryincrease in deposit insurance for credit unions and banks to helpboost depositor confidence, especially in small institutions, manyof which have been severally damaged from the storm. Lawmakers havealso expressed interest in temporarily waiving minimum capitalrequirements, known as PCA, for credit unions in the affectedareas.