Frank wants CUs to have relief source

WASHINGTON (1/6/09)—House Financial Services Committee Chairman Barney Frank (D-Mass.) recently wrote to the head of the Federal Reserve Board to relate his concern that the U.S. Treasury Department's decision not to use its relief funds to buy troubled assets may particularly hurt credit unions.

Frank told Fed Chairman Ben Bernanke that Treasury's "misguided decision" not to use Troubled Asset Relief Program (TARP) funds to buy underwater assets may cause credit unions to lose a chance "to make progress in diminishing the number of foreclosures."

"Therefore," Frank said in a Dec. 23 letter, "I was pleased that you supported the National Credit Union Administration's ability to use the Central Liquidity Facility (CLF) for its new initiatives to provide liquidity into the credit unions system, specifically into the corporate credit unions."

The letter noted CU HARP, designed to assist homeowners who are facing mortgage delinquency, default or foreclosure, and CU SIP, intended to provide additional liquidity to the corporate credit union system.

Frank added that he would appreciate the Fed chairman's continued support for maintaining the removal of a statutory cap on the CLF's borrowing authority, as well as Bernanke's "continued flexibility" to respond to similar future proposal "when they serve the national best interest."