WASHINGTON – Credit union lobbyists were working over the weekend to increase emergency funding for NCUA, just as the number of troubled credit unions is mushrooming, at the same time trying to separate the issue from the so-called cramdown bill which would allow troubled homeowners to ask the bankruptcy courts to restructure their mortgages.
The cramdown measure was attached last month to a bill that passed the House which would extend funding for the National CU Share Insurance Fund by providing increased borrowing capacity and give credit unions as much as five years to pay back the $5.9 billion cost of NCUA’s corporate credit union bailout.
Credit union and banking lobbyists were working over the weekend to decouple the bill, which would also make permanent last fall’s increase in federal deposit insurance coverage to $250,000 per account. House leaders hoped the combination of the deposit insurance provisions with the cramdown bill would make it difficult for the credit unions and banks to oppose the bill. As of last night it was unclear whether the Senate would agree to separate the measures. "We don’t know where they’re going to go with this," one credit union lobbyist told The Credit Union Journal Sunday night.
The credit union representatives were also working to get into Senate legislation a provision to create a Corporate Stabilization Fund that would, in effect, create a separate $6 billion insurance fund for the troubled corporates; to increase NCUA borrowing authority to as much as $40 billion to deal with a systemic crisis; and to give credit unions as long as eight years to repay the costs of the corporate bailout.
