NAFCU-backed stabilization measure passes

May 7, 2009 – Legislation backed by NAFCU to create a corporate credit union stabilization fund was approved by the Senate on Wednesday by a vote of 91-5.

NAFCU President Fred Becker called the Senate’s passage of S. 896, the Helping Families Save Their Homes Act, a “very significant achievement for consumers and credit unions alike” and noted that NAFCU has been especially focused on securing two provisions in the bill: a corporate credit union stabilization fund and extending the $250,000 federal share insurance limit.

The Senate approved a substitute amendment offered by Banking Chairman Chris Dodd, D-Conn., and Ranking Member Richard Shelby, R-Ala., which included the creation of the stabilization fund and a four-year extension of the $250,000 federal share and deposit insurance limit. “We want to thank Chairman Dodd and Ranking Member Shelby for recognizing the need for these important provisions,” Becker said.

In addition to creating the fund and extending federal share and deposit insurance limits, the Dodd-Shelby amendment would:

• raise NCUA’s current $100 million borrowing authority to $6 billion;
  
  
• provide NCUA with $30 billion in emergency borrowing;
  
  
• permit NCUA to transfer the borrowed amounts to the stabilization fund; and
  
  
• allow eight years for repayment of National Credit Union Share Insurance Fund premiums. 

NAFCU has been very supportive of the Dodd-Shelby amendment, but Becker also said that NAFCU believes NCUA’s borrowing authority should be set higher to allow for contingencies.

NCUA Chairman Michael Fryzel said the Senate’s approval of the stabilization fund is “an unmistakable affirmation by lawmakers that the credit union industry can and will take care of its own problems.”

S.896 will now move to the House where lawmakers could either act on the measure, as written, or request a conference committee with the Senate over the bill and the House-passed version, H.R. 1106, which was approved in March.