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Cramdown unlikely in Senate housing bill
WASHIINGTON (4/30/09)—A Senate housing bill, expected to be voted today, appears to be advancing with important language for credit unions, and without the contentious mortgage bankruptcy provisions it once featured. The bill (S. 896) intends to make permanent the increased, $250,000 deposit and share insurance cap. It would also allow credit unions to spread out the cost of their premium assessment that has resulted from losses at wholesale corporate credit unions. (See related stories: CUNA supports Dodd amendment to housing bill; CU action urged on NCUSIF provisions.) However, negotiations stalled between a key senator and financial services industry representatives—including the Credit Union National Association (CUNA)—over language that would have improved provisions allowing bankruptcy judges to modify—or cramdown—existing mortgages. Strongly opposed to a House-passed bill that gave broad authority to bankruptcy judges, CUNA worked closely with key senators and their staffs to narrow the scope of those provisions and mitigate its impact on credit unions in case Congress passed a bill containing that authority. CUNA President/CEO Dan Mica said Wednesday, “CUNA stayed at the table in the Senate, negotiating in good faith for sound public policy on behalf of credit unions and their members. We are gratified that we influenced a number of improvements to the legislation by our commitment.” He noted, however, that CUNA finally came to a point where the negotiations could not produce a bill that met all negotiating parties’ concerns and still pass the Senate. “Given this, we have suspended negotiations on the judicial mortgage modification provisions. We have the utmost respect for Sen. Durbin; we look forward to working with him on many more important policy issues,” Mica said.


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