Lawmakers Debate Means Of Bailout
WASHINGTON-Lawmakers and financial institutions are proposing a massive government-backed bailout for home, business and other loans hat may fail as a result of Hurricane Katrina and its aftermath. Under one scenario, the government would create a fund to buy impaired loans in storm-affected areas, then package them into bonds, in a fashion similar to the s&l bailout. The proposal was being endorsed this week by banking trade groups, as well as some consumer groups, who are worried about uninsured losses accruing to homeowners and other victims of the massive storm.
"We would like to be involved in the creation and implementation of that fund, however, to ensure that consumers and homeowners are protected as well as the financial institutions," said Hilary Shelton, director of the NAACP's Washington Bureau, during a hearing Wednesday before the House Financial Services Subcommittee on Financial Institutions.
NCUA Urges Easing Of Captial Standards
WASHINGTON-NCUA has called on the Treasury Department to ease minimum capital standards for credit unions in the Gulf Coast areas that were affected by Hurricane Katrina. NCUA Chairman JoAnn Johnson said she raised the issue of a temporary ease on minimum capital, known as prompt corrective action, with Treasury Secretary John Snow, who is exploring similar forbearance for banks and thrifts affected by the hurricane. "I brought this up with Secretary Snow, and I also made a pitch for risk-based capital," Johnson told The Credit Union Journal. Many of those credit unions, noted Johnson, are going to need to use some of their capital to rebuild or finance repairs. Earlier in the day, representatives from both CUNA and NAFCU asked Congress for a temporary ease or waiving of PCA requirements for credit unions in hurricane-affected areas, as part of a financial assistance package.
Payday Bill In Mich.
LANSING, Mich.-The Michigan State Senate has approved a bill to regulate "payday" loans in the state. The bill limits loan amounts to $600 and and caps service fees between 11% and 15%. The bill now returns to the House, which approved a similar bill earlier this year.
CMG To Emerald Isle
DUBLIN, Ireland-CUNA Mutual Group has formed a life assurance company in Ireland. Called CUNA Mutual Life Assurance (Europe) Ltd., the company will provide Irish credit unions with financial services alternatives and focus initially on credit insurance programs, including loan protection, life savings and death benefit insurance to the country's more than 400 credit unions. Since 2003, CUNA Mutual has offered limited life insurance programs for select Irish credit unions through its association with Eagle Star Life Ltd.
"CUNA Mutual Group is now better positioned to serve credit unions in Ireland, and, because of European single-market rules, the United Kingdom where we have a branch office," said Ralph Swoboda, CUNA Mutual, senior VP-International Division. "The new company also allows us to pursue future opportunities as they arise elsewhere in Europe."
The company began business operations Aug. 1.
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