WASHINGTON – In a thinly veiled attempt to defuse a withering credit union and bank lobby against legislation to allow homeowners to cramdown their mortgages in bankruptcy court House leaders have combined the cramdown bill with a deposit insurance bill badly wanted by the two lobby groups.
The merging of the two unrelated bills was aimed at giving credit union and bank representatives pause in their avid opposition to the cramdown measure. Both groups have been working towards passage of the deposit insurance bill, which makes permanent the increase to coverage of $250,000 per account.
The bill would also provide relief for credit unions from the $5 billion corporate bailout charge by allowing NCUA to spread it over five years, making it especially important for credit unions.
The ploy appeared to catch the credit union lobby somewhat off guard yesterday. "Our hope is they will separate the two, or it will get separated when it gets to the Senate," Ryan Donovan, senior lobbyist for CUNA, told The Credit Union Journal yesterday.
Either way, both bills are expected to pass the House as early as Thursday, said Donovan.
NAFCU President Fred Becker called on House leaders yesterday to sever the two bills.
