WASHINGTON – House leaders have agreed to include a provision in a bill to be voted today amending the Troubled Asset Relief Program that would allow credit unions to receive cash infusions under the TARP.
But prospects for the bill are uncertain, as the Senate is not expected to take it up until after the Obama administration takes office.
The House vote is aimed at clearing the way for the Treasury Department under the new President to spend the remaining $350 billion of the $700 billion Congress approved for the banking bailout last fall in a way to help troubled institutions. But unless the Senate acts on the new bill too, credit unions will still be unable to tap into the TARP funds. That’s because current law will not allow credit unions to count government assistance, like cash infusions under TARP, as net worth, or capital.
The credit union provision in the new bill would allow credit unions to count TARP cash, as well as other government assistance, like emergency loans from the National CU Share Insurance Fund, or Treasury purchases of distressed securities, as net worth.
The new TARP bill would also extend the increase in federal deposit insurance coverage under NCUSIF and the FDIC to $250,000 on a permanent basis, and provide tens of billions of dollars of TARP funds to assist at-risk homeowners.
