WASHINGTON (7/31/12)--Some members of the U.S. Senate have indicated that combining credit unions' bill to raise the member business lending (MBL) cap with a bill banks want that would extend the Transaction Account Guarantee (TAG) program for deposit insurance might be workable, the Credit Union National Association (CUNA) told Reuters Monday.
John Magill, CUNA executive vice president, told Reuters that the senators CUNA talks to have indicated that "marrying TAG, which the banks really want, with the MBL bill, which we are lobbying for, would work." His comments were featured in the article, entitled, "Banks urge U.S. Congress to extend crisis-era deposit insurance."
Magill noted that CUNA will work to ensure that TAG will not end up passing unless the MBL bill is passed; "CUNA has been promised votes in the House and the Senate on its bill. The banks don't have a bill or a vehicle to attach one."
The American Bankers Association and the Independent Community Bankers Association said they would oppose giving credit unions more lending capability in exchange for the temporary TAG extension.
The TAG program is temporary unlimited coverage in addition to, and separate from, the coverage of at least $250,000 that is available to depositors under the Federal Deposit Insurance Corp's (FDIC) general deposit rules.
Without extending the TAG program, the FDIC's unlimited deposit insurance for "noninterest-bearing transaction accounts" would end on Dec. 31. The banks are seeking a two-year extension.
The MBL bill, which the Senate is expected to vote on this year, would raise the cap for credit unions to 27.5% of assets, from 12.25%. The House has pending legislation that would do the same. CUNA estimates that lifting the cap would create 140,000 jobs and inject $13 billion in new funds into the economy during the first year after enactment, at no cost to taxpayers.