WASHINGTON – The credit union lobby continued yesterday to fight the bill to give bankruptcy courts authority over mortgages, rejecting a compromise that would ease the measure, even as the bill comes to a vote before the House as soon as this afternoon.
"While we appreciate their continuing to work with us, we still have serious concerns," said NAFCU President Fred Becker, of a compromise proposal by House Democrat leaders that would require that borrowers share in any profits after a property in bankruptcy is sold with lenders, and make a reduction in interest, rather than principal, the main focus of the bankruptcy judges.
Both NAFCU and CUNA are continuing to push lawmakers to limit the cramdown provision to subprime, Alt-A and other non-traditional mortgages, which would keep the vast majority of credit union home loans out of the bankruptcy courts.
John Magill, chief lobbyist for CUNA, said they will continue work on limiting the scope of the bill once it gets to the Senate.
The credit union lobby though is fighting with one hand tied behind its back because the cramdown measure they oppose is attached to a deposit insurance bill they support. That portion would extend the $250,000 coverage for all federally insured deposits that was passed last summer, as well as allow NCUA to stretch out the assessments to pay for the $5 billion corporate credit union bailout for as long as five years.
