WASHINGTON – The Senate Banking Committee endorsed a measure yesterday that would provide as much as $24 billion in funding for the National CU Share Insurance Fund on an emergency basis, moving ahead with help for NCUA’s corporate credit union bailout.
The provision would vastly increase the amount of funds NCUA could borrow from the Treasury for the NCUSIF from the current $100 million to a nominal $6 billion, with an additional $18 billion available on an emergency basis.
NCUA, which had asked for as much as $30 billion of emergency borrowing capacity, said yesterday’s action was an important step forward in getting Congress to help in the corporate bailout. The measure, also marks the first time Congress has even recognized emergency borrowing needs for NCUA, according to NCUA spokesman John McKechnie.In addition, the easy passage of the bill shows the broad support for the provision, he said.
The measure, attached to a bill barring a variety of abusive credit card practice, is one of several moving through Congress that would help credit unions pay for the $5.9 billion cost of the corporate bailout. Brad Thaler, senior lobbyist for NAFCU, said the variety of measures are more likely to be passed as part of a single package, such as the deposit insurance reform bill being drafted by the Senate. "The credit card bill is not the likely vehicle for these measures," Thaler told The Credit Union Journal yesterday.
Among the measures before Congress in different bills are the increased borrowing capacity for NCUA; an extension of time for NCUA to recapitalize the NCUSIF to as long as five years and proposals to expand the powers of the Central Liquidity Facility.
A plan endorsed by the NCUA Board last week to create a separate insurance fund to effectuate the corporate bailout has yet to be introduced into legislation.
