WASHINGTON – The House Judiciary Committee is expected to vote this morning on a compromise bill that would exempt the vast majority of credit unions’ mortgages from a proposal to allow bankruptcy courts to restructure mortgages of troubled borrowers.
Consumer groups, including the credit union-backed Center for Responsible Lending, have signed off on the proposal, which will be offered by Rep. John Conyers, the chairman of the judiciary panel. The compromise would also sunset after seven years.
The NAFCU agreement would confine the restructuring under bankruptcy to subprime loans that have already been made, and not include traditional loans that are the bread and butter of credit unions. It would only cover those mortgages that are currently in foreclosure. "We think it will exempt over 95% of credit union mortgage," one NAFCU lobbyist told Credit Union Journal yesterday. "It may not be perfect for everybody, but we think it’s a workable solution."
