WASHINGTON – NCUA Chairman Michael Fryzel expanded efforts at a credit union relief package today by calling on Congress to secure funds from the Treasury’s Troubled Asset Relief Program to finance a credit union-only purchase of distressed mortgage assets.
"A TARP-like program, which creates a market for certain distressed assets, would be of significant and tangible benefit to credit unions," said Fryzel in a letter to congressional leaders. "I therefore request your assistance in securing those funds necessary for NCUA to construct a TARP identical" to the one created by Congress.
The NCUA Chairman said NCUA would establish standards and procedures for the use of the funds.
Fryzel did not request a specific amount, but CUNA has been working with the agency for a TARP-like fund that would use as much as $30 billion of the $700 billion set aside by Congress for the Treasury’s TARP.
Fryzel has expressed dismay to both congressional leaders and the Treasury over last week’s decision by the Treasury not to use the TARP funds to buy distressed mortgages assets, as the money was intended by Congress. Because credit unions are not eligible for the cash being infused by Treasury into more than 200 banks, last week’s decision effectively cuts credit unions out of the massive financial bailout program.
Fryzel yesterday asked for Congress to intervene on behalf of credit unions to obtain some of the vast funding available to help financial institutions.
Fryzel’s plea comes a day after the NCUA Chairman announced the creation of a new program that will funnel billions of dollars of low-cost funds to credit unions to help them refinance at-risk mortgages held by their members. The CU Homeowner Affordability Program, or CU HARP, would provide loans through the Central Liquidity Facility, the emergency loan fund managed by NCUA, to credit unions at rates as low as 1.75%.
