Dozens of credit unions and banks in the area hit by Hurricane Katrina would be given forbearance on minimum capital requirements-called PCA for prompt corrective action-under a bill introduced by New Orleans Congressman Richard Baker.
The bill would allow NCUA and the banking regulators to waive minimum capital requirements for those institutions that have had their balance sheets negatively impacted by the massive hurricane and its aftermath. The bill would provide the relief from PCA limits for 18 months.
Baker's bill would also waive fees charged by the Federal Reserve for wire transfers in the affected area.
It would also encourage credit unions and banks to continue to relax their identification requirements for individuals in the storm-ravaged areas who want to cash government benefit checks.
CUNA last week asked Baker to consider extending the period for PCA relief for another 18 months, to a total of 36 months, and also to include credit unions not only in the affected areas but those with a significant number of members within those areas.
The Baker bill is one of more than a dozen introduced in Congress already to deal with the massive disaster. Others would indemnify credit unions and banks for bad checks they cashed after the storm, allow home owners and business owners to retroactively obtain flood insurance and provide billions of dollars in reconstruction funding.
As one of the leaders of the Louisiana congressional delegation-he is chairman of one of the House Financial Institutions subcommittees-Baker will have a leading role in any Katrina-related legislation that is passed by Congress. The next few weeks promises to be consumed with relief-related bills as Congress tries to deal with the huge disaster before it ends for the year.
