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Fryzel S. 896 is a turning point for CUs
ALEXANDRIA, Va. (5/22/09)—Wednesday’s presidential signing of S. 896, the Helping Families Save Their Homes Act, “marked the culmination of a very difficult chapter” in the National Credit Union Administration’s ongoing efforts to "resolve the difficulties facing corporate credit unions, and the credit union industry as a whole,” NCUA Chairman Michael Fryzel said in a statement Thursday. The enactment of S. 896 and the corporate credit union stabilization plans contained therein provide “a responsible and pragmatic mechanism for credit unions to maintain a strong federal insurance fund in a financially manageable manner,” Fryzel added. S. 896, which passed both legislative branches on May 19, will allow credit unions to spread the cost of National Credit Union Share Insurance Fund (NCUSIF) replenishment over a longer period of time, with a total of eight years to deal with the cost of a premium assessment that has resulted from losses at wholesale corporate credit unions. Any impairment related to the NCUSIF replenishment may be booked over a seven-year period. The bill also extended the $250,000 share and deposit insurance coverage ceiling for credit unions through 2013 and increased NCUA’s borrowing authority to $6 billion, with a possible further extension to $30 billion under exigent circumstances. Further, Fryzel said that the interest shown at a May 20 House Financial Institutions subcommittee hearing on NCUA’s corporate credit union stabilization plan was “a further indication of the importance Congress has placed on the NCUA and the industry joining together to find workable solutions.” (See related May 21 story: CUNA urges Congress to address CU capital) Fryzel asked for credit unions and politicians’ input going forward, and “underscore[d]” his recent subcommittee testimony, saying that NCUA will put its recent, hard-learned lessons “to good use” as it moves forward with corporate credit union reforms. “The industry that we all care so much about, and that has served America’s consumers so well for the past century, deserves nothing less, and I look forward to the task ahead with optimism and a sense of purpose,” he added.
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