Congress Plans Indemnity Against BadKatrina Payments
WASHINGTON - (09/22/05) -- Congress was expected to introduce abill as early as Thursday that would set up the Federal Reserve'ssurplus funds as an insurer to indemnify bad checks cashed bycredit unions and banks in the wake of Hurricane Katrina. The billwould cover all Katrina-related checks that were bounced orcounterfeit up to $2,000 each. "This is legislation that is badlyneeded," Rep. Spencer Bachus, the chairman of the House FinancialServices Subcommittee on Financial Institutions, told The CreditUnion Journal. Bachus also said he expects a number of other billsto be introduced that would protect and help the credit unions andbanks to provide emergency services over the coming weeks. Onemeasure, he said, will be protect those institutions that relaxedtheir lending rules to help Katrina victims, by extending latepayments, forbearing on loans, or eliminating fees. "The regulatorshave asked the financial institutions to relax their rules, so weneed to have some kind of 'hold-harmless' provision so when theexaminers come in down the road they (credit unions and banks) arenot penalized," said the Alabama Republican.