|
October 3, 2008 - The House approved the Emergency Economic Stimulus Act on October 3, a measure that will allow credit unions and other financial institutions to sell its problem loans to the federal government.
The main purpose of the bill is to give the U.S. Treasury Secretary authority to purchase troubled assets from financial institutions to restore liquidity and stability in the U.S. financial system. Credit unions are included in the definition of a financial institution in the Act, so they may participate in the Troubled Assets Relief Program (TARP).
Before the Senate passed the bill on October 1 by a vote of 74 to 15, it changed provisions in the bill, making it more acceptable to some members of Congress.
The Senate version of the bill added a provision to temporarily increase the deposit and share insurance coverage for banks and credit unions. The increase to $250,000 from $100,000 begins the date of enactment of the act and ends December 31, 2009.
The revised package also provides that the National Credit Union Administration (NCUA) will play a consultative role with the other regulatory agencies responsible for implementing the Troubled Asset Relief Program (TARP). NASCUS will work with the NCUA and others to ensure state interests are represented.
Some credit unions will also benefit from the provision that provides authority to the Securities and Exchange Commission to suspend mark-to-market accounting, potentially increasing a credit union’s net worth. You can read more about this issue here.
At a press conference following the passage of the bill, House Financial Services Committee Chairman Barney Frank (D-Mass.) explained that the Committee will look at regulatory restructuring to assess areas for reform. As they debated economic relief legislation, NASCUS wrote to Congressional leaders on September 24 to ensure that Congress was deliberative in considering any regulatory restructuring -- either now or in the future -- that would damage dual chartering or state authority.
“NASCUS remains steadfastly committed to preserving dual chartering and the state credit union system,” said NASCUS President and CEO Mary Martha Fortney. “As Congress and federal agencies address regulatory reform in the near term or the next Congress, NASCUS will continue to reinforce the importance of dual chartering, choice in financial services and the value of the state system.”
The President is expected to sign the bill later today and the Treasury is committed to quickly implementing the provisions included in the bill.
To view a letter NASCUS sent to Congressional leaders, click here.
|
