WASHINGTON — Credit unions would be eligible to participate in the Treasury Department's $700 billion illiquid asset purchase program under the agreement in principle that lawmakers announced today.
Although lobbyists for CUNA and NAFCU emphasized that the details could change as the measure moves through Congress, they said they were pleased that it looked like credit unions would be allowed to sell their bad assets and that the measure does not include a provision to permit judges to restructure mortgages for people facing foreclosure.
Congressional leaders said they will try to attach the measure to the continuing resolution which funds the government when the new fiscal year starts next Wednesday. That is necessary because lawmakers haven't passed a budget yet.
The continuing resolution contains a provision that would eliminate the artificial cap on the Central Liquidity Facility's lending capabilities. Currently, it is capped at $1.5 billion and the change would allow the facility to lend money to credit unions based on the formula established in the Federal Credit Union Act, which is estimated to be $41.5 billion.
CUNA Vice President of Legislative Affairs Ryan Donovan said the inclusion of credit unions “is a clear indication from Congress of the role they play in the financial services system.”
NAFCU Director of Legislative Affairs Brad Thaler said “I hope credit unions won't have to use the program but it's important that they are included and won't be disadvantaged.”
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