House panel to discuss corporate stabilization
WASHINGTON (5/13/09)—A House Financial Services subcommittee will discuss the National Credit Union Administration's (NCUA) corporate credit union stabilization plan in a May 20 hearing.
The Credit Union National Association (CUNA) will be among those testifying before the House Financial Services subcommittee on domestic and international monetary policy, trade and technology.
The witness panel is also expected to include representatives from the National Association of Federal Credit Unions and the National Association of State Credit Union Supervisors. Representatives from the NCUA will testify separately, prior to the CUNA panel.
The hearing follows Senate deliberation on S. 896, the Helping Families Save Their Homes Act, which passed by an 86 vote margin late last week. (See related May 7 story: CU stabilization, insurance fund mods clear Senate.)
That bill included language that would increase the National Credit Union Share Insurance Fund's (NCUSIF) borrowing authority to $6 billion and allow credit unions to spread the cost of NCUSIF replenishment over a longer time period.
Currently, NCUA does not feel that it has the authority to spread out NCUSIF related costs to federally insured credit unions. Credit unions are paying into the NCUSIF in the form of assessments that are collected as one lump sum.
CUNA President/CEO Dan Mica has called upon Congress to extend the time period for paying these assessments, as such a move would allow credit unions to increase their consumer lending activities.
A corporate credit union stabilization plan that was presented by NCUA in February calls for a $1 billion infusion and an initial estimate of $3.70 billion to guarantee current corporate credit union deposits. Under this plan, NCUA estimated that it would require $5.9 billion in total funds to restore the NCUSIF to its normal operating equity ratio level of 1.3%.
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