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CUNA alert seeks cramdown opposition
WASHINGTON (1/27/09)—In a continuing effort to keep the spotlight on credit union concerns regarding mortgage bankruptcy legislation, the Credit Union National Association (CUNA) is seeking grassroots action to block current “cramdown” bills. CUNA issued an Action Alert Monday urging state leagues and their member credit unions to contact federal lawmakers to opposed S. 61 and H.R. 200 as currently written. Those bills would allow a bankruptcy court to modify a debtor's mortgage terms-- an action known as a “cramdown.” In its alert, CUNA warns credit unions that the bills do not limit mortgage rewrites to the types predatory loans that fueled the current housing crisis; the provision would apply to all existing mortgages. “In the current crisis, credit unions are already working with members by stretching terms and lowering rates,” CUNA noted in its communication. “Credit unions use strong underwriting standards to make mortgages to their members and should not be swept up with this far-reaching bankruptcy reform proposal. “We need to send the message that significant changes need to be made to this legislation before it is enacted into law, and in the absence of significant change, credit unions must oppose the legislation,” CUNA urged. CUNA also encouraged credit unions to ask House and Senate lawmakers not to include "cramdown" legislation in an upcoming economic stimulus bill. CUNA last week sent letters to Capitol Hill to oppose broad cramdown authority and to suggest a more targeted approach. CUNA’s Action Alert was sent in advance of today’s scheduled House Judiciary Committee hearing on H.R. 200.


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