WASHINGTON (10/1/08)—As members of the U.S. Congress and the Bush administration continue to work to craft an economic rescue plan palatable enough to be passed by the House and Senate, the White House is considering the possibility of adding a temporary increase in deposit insurance, possibly up to $250,000 or $300,000, into the emergency legislation.
Meanwhile, Credit Union National Association (CUNA) lobbyists learned late Tuesday that the Senate is expected to possibly vote today on a version of the financial rescue package with provisions to increase deposit insurance coverage for banks and credit unions.
The apparent developments came shortly after CUNA urged President George W. Bush and U.S. Treasury Secretary Henry Paulson to make sure to include credit unions in any plans for increased deposit insurance coverage.
Additionally, CUNA asked the White House to consider complimenting the parity in savings insurance for credit unions with a risk-based capital system that will provide credit unions with the flexibility they need to handle the unexpected increasing level of savings flowing into credit unions.
In the letters, CUNA President/CEO Dan Mica pointed out that savings have been flowing into credit unions in the wake of recent closings and sales of financial institutions.
To help credit unions continue to help consumers and absorb the savings inflow, Mica asked the president to consider complimenting the deposit insurance coverage "with a risk-based capital system (which) will provide credit unions and our regulator with additional tools to continue to serve their members safely and soundly."
Mica reminded in the letter that CUNA has been working for the last six years on behalf the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537), Title I of which would define a risk-based capital system for credit unions.
"We believe this legislation is more important now than ever, in light of the fact that credit markets are frozen, and consumers and small businesses are reporting great difficulties getting loans," Mica wrote, and added that banks already operate under a similar risk-based capital system.
courtesy of cuna.org