WASHINGTON – Senate leaders threatened to pull the corporate credit union bailout bill from the floor Friday after senators from both parties tried to load the bill up with as many as 20 amendments.
"If we get bogged down with too many amendments we may have to pull it from the floor, maybe until the fall," said Sen. Chris Dodd, echoing sentiments voiced by Senate Majority Leader Harry Reid.
The emergence of additional amendments delayed last week’s scheduled vote on the bill, which would create a Corporate CU Stabilization Fund, and pushing it into this week. And a debate on as many as 20 amendments scheduled for today and tomorrow, could delay the bill further.
"Partly it’s a threat, but coming from the Majority Leader we have to take it seriously," Brad Thaler, a senior lobbyist, told The Credit Union Journal on Sunday. "It’s going to depend on how many amendments they get voted on Monday."
Dodd said he hopes to vote on all of the amendments today and tomorrow and vote final passage of the bill tomorrow.
Though the bill is being touted as a housing bill, its major provisions relate to deposit insurance and the corporate credit union bailout. The bill would create a $6 billion corporate stabilization fund and also allow NCUA to stretch out costs to replenish the National CU Share Insurance Fund for as long as eight years.
The stabilization fund, which would be capitalized with premiums assessed credit unions, would be financed over seven years, after which it would be merged into the NCUSIF.
The bill would also provide as much as $30 billion in emergency funding for NCUA to help it stem a systemic crisis, such as the failure of corporate credit unions in addition to U.S. Central FCU and WesCorp FCU.
Separately, the bill would triple the emergency funding for the FDIC to $100 billion to help it resolve growing numbers of bank failures.
And it would extend the increase in federal deposit insurance for both credit unions and banks to $250,000 per account for another four years.
Earlier last week the Senate rejected a proposal, known as cramdowns, which would have allowed troubled homeowners to ask a bankruptcy court to amend the terms of their mortgages. Sen. Richard Durbin, the chief sponsor of the cramdown amendment, vowed to bring it back in another form.
House leaders are drawing up their own corporate bailout bill that is expected to be introduced later this month, before scheduled hearings on the failures of U.S. Central and WesCorp.
House leaders called on Dodd last week to move the corporate bailout bill. House Financial Services Committee Chairman Barney Frank and congressional credit union champion Paul Kanjorski said passage of the corporate bailout plan will be a top priority of theirs in the coming weeks. "Swift legislation action will also allow credit union managers to focus on their most important mission–providing credit to their members–rather than worrying about how they will pay for an excessive one-time charge and paring back lending during these difficult economic times," they said in a letter to Dodd.
NCUA Chairman Michael Fryzel said he welcomes congressional hearings on NCUA’s corporate bailout. "NCUA wants to work in collaboration with Congress, as well as the credit union industry, in reforming these important and useful entities," he said in a statement.
