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Cramdown changes remain a CUNA priority
WASHINGTON (4/23/09)--Noting the ongoing work of his organization to reduce the impact of mortgage bankruptcy legislation on credit unions, Credit Union National Association (CUNA) President/CEO Dan Mica said Wednesday he believes progress has been made on two key issues. Mica noted a pronouncement issued by the National Association of Federal Credit Unions (NAFCU) that said it opposed compromise legislation currently being worked out in the Senate. NAFCU said its board voted unanimously Tuesday to oppose the revised mortgage bankruptcy provisions because of a lack of available information regarding work-out plans for subordinate liens, as well as how the Senate legislation would affect existing private mortgage insurance contracts. NAFCU sent a letter to Sen. Dick Durbin (D-Ill.), the majority whip, and the entire Senate announcing its opposition on Wednesday. Mica said CUNA was surprised at the content of NAFCU’s letter: “We thought that association had always opposed the House version of cram downs, as has CUNA.” “From the beginning of the discussions with the Senate, all opposed the House version of the bill, and CUNA engaged in good-faith negotiations aimed at good public policy and addressing concerns of our industry,” Mica said. He added,” In fact, because we stayed at the table, we believe we are very close to acceptable resolutions on the two issues mentioned by NAFCU.” However, he underscored that no deal has been made by CUNA regarding the revised legislation. “This is not the time to merely walk away; there is too much at stake for credit unions, including additional issues that have a direct impact on credit unions and service to their members. CUNA will continue to work with Sen. Durbin and Senate leaders to develop a legislative approach that limits negative impact on credit unions.” The U.S. House of Representatives voted 234-191 March 5 in favor of H.R. 1106, Helping Families Save Their Homes Act—its version of mortgage bankruptcy—or “cramdown”—legislation. The bill would allow broad authority for bankruptcy judges to modify the terms of existing mortgages, which the CUNA has said could lead to borrowers' gaming of the system.


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