As Puerto Rico teeters on the brink of default, House Republicans said they will make legislation public this week that would leave the fate of the island's territory chartered and supervised cooperativas up to an independent oversight board.
The legislation, which will be unveiled by House Natural Resources Chairman Rob Bishop (R-Utah), would not directly address the issue of the island's cooperativas, a committee aide confirmed Monday.
Instead, the cooperativas would be handled as part of an overall plan developed by the oversight committee.
Puerto Rico is home to both federally (NCUA-) chartered credit unions and ones supervised by the Corporation for the Supervision and Insurance of Cooperatives. That office is part of the territory's governance structure and guarantees deposits of up to $250,000.
However, as Puerto Rico faces insolvency, so do the island's cooperativas. About 100 cooperativas chartered by the territory hold millions of dollars in government bonds.
The Obama Administration has proposed giving the island access to federal bankruptcy laws.
House Speaker Paul Ryan (R-Wis.) gave Bishop until the end of the month to develop his own legislative proposal. The Natural Resources Committee has oversight power for the nation's territories.
Bishop's plan would create a five-member voting board. The president would select its members and at least two would be required to live in Puerto Rico. The Treasury Secretary and the Governor of Puerto Rico would serve as non-voting members.
The board would audit the government's books, improve operations, look for savings and decide how much of the island's debt would have to be restructured.
Any debt restructuring would be court-supervised, but the island would not be permitted to file for bankruptcy.
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