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Kanjorski offers corporate CU stabilization bill
WASHINGTON (5/14/09)—Rep. Paul Kanjorski (D-Pa.), a longtime supporter of the credit union movement, has introduced legislation that will “recapitalize the credit union deposit insurance system to ensure the long-term stability of the credit union system.” H.R. 2351, the Credit Union Share Insurance Stabilization Act, which Kanjorski hailed as a “viable, effective, and appropriate response” to the problems currently faced by credit unions, would create a temporary corporate credit union stabilization fund. This fund would merge with the National Credit Union Share Insurance Fund (NCUSIF) once the current rescue funding crisis has passed. As introduced, the bill would increase the amount that the National Credit Union Administration (NCUA) may borrow from the U.S. Treasury Department from $100 million to $6 billion and would allow NCUA to borrow as much as $30 billion in funds in the event of an emergency. This emergency borrowing authority would extend until Dec. 31, 2010 and would only apply “under certain circumstances and procedures.” Additionally, H.R. 2351 would allow credit unions to spread the cost of NCUSIF replenishment over an eight-year period when the insurance funds fall below a certain level. Currently, credit unions are paying into the NCUSIF in the form of assessments that are collected as one lump sum. Reps. Luis V. Gutierrez (D-Ill.), Ed Royce (R-Calif.), David Scott (D-Ga.), and Steven LaTourette (R-Ohio) joined Kanjorski in introducing the legislation. The structural changes to the corporate credit union setup suggested by this bill are “essential going forward,” Rep. Royce said. The bill has bipartisan support, and Kanjorski said he is confident that the legislation would be enacted this year. In a statement following the introduction of the bill, NCUA Chairman Michael Fryzel expressed his “deep appreciation” for H.R. 2351, legislation that would maintain the “momentum” created by the recent Senate passage of the NCUA Corporate Credit Union Stabilization Program and move “NCUA and the credit union industry another step closer to creating a real and pragmatic solution to the corporate credit union situation.” Credit Union National Association (CUNA) President/CEO Dan Mica praised the bill, stating that spreading the “cost of government assistance to the corporate credit union sector” over a longer time period “will give all federally insured credit unions more resources in hand to lend back into their communities and help foster economic growth.” Kanjorski’s bill closely mirrors portions of S. 896, the Helping Families Save Their Homes Act, which passed the Senate by an 86 vote margin late last week. (See related May 7 story: CU stabilization, insurance fund mods clear Senate.) CUNA, the NCUA, and other credit union industry representatives will testify at a May 20 House Financial Services subcommittee hearing on NCUA’s corporate credit union stabilization plan. (See related May 13 story: House panel to discuss corporate stabilization.)


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