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May 13, 2009 - Congressman Paul Kanjorski (D-Pa.) introduced H.R. 2351 on May 13 to offer the credit union system solutions to tackle the impact of the $5.9 billion loss from the corporate network.
Similar to the provisions approved last week in the Senate bill S. 896, the House bill would provide the National Credit Union Administration (NCUA) with the authority to establish a fund to absorb losses from the corporate credit union system, thereby allowing credit unions more time to recapitalize the National Credit Union Share Insurance Fund (NCUSIF). H.R. 2351 states that the NCUSIF would need to return to its designated equity ratio before the end of an eight-year period, rather than in the same year as currently required.
The bill would also give NCUA borrowing authority of up to $6 billion from the Treasury and an emergency borrowing authority of up to $30 billion until December 31, 2010.
NASCUS Chairman George Reynolds (GA) will testify on May 20 at a hearing of the House Subcommittee on Financial Institutions and Consumer Credit to discuss the legislative and regulatory solutions needed to address the corporate credit union losses and to mitigate the impact on natural person credit unions. To read more on the hearing, click here.
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