WASHINGTON (11/13/08)--After the U.S. Treasury Department yesterday said its Troubled Asset Relief Program would no longer seek to buy distressed mortgage-backed assets, the Credit Union National Association (CUNA) reiterated its call on the National Credit Union Administration (NCUA) to create its own credit union-funded troubled-asset relief program through the National Credit Union Share Insurance Fund.
After Wednesday's announcement by Treasury Secretary Henry Paulson, CUNA President/CEO Dan Mica expressed concern about the Treasury's change of direction in not using the $700 billion of congressionally mandated funds for purchase of troubled assets from U.S. financial institutions--including credit unions.
"Although the Economic Emergency Stabilization Act explicitly includes America's credit unions, the implementation of the program thus far has not included credit unions, and the Treasury's announcement makes it unclear how credit unions will be included," said Mica.
The CUNA leader pointed out that it has been CUNA's position that credit unions not be disadvantaged by the government's response to the nation's financial crisis.
Credit unions could have been covered under provisions of the original troubled asset purchase plan. But, because of the credit union capital structure, to date credit unions have not been eligible for the capital infusion.
"An asset purchase program would have helped to establish values for some of these troubled assets in today's dysfunctional markets," said Mica.
"We must be assured that the interests and needs of our 8,000 cooperatively owned financial institutions are addressed so they may help their 90 million members deal with this financial crisis," said Mica. "At the least, we urge the Treasury to consider a set aside of funds to be used by Main Street financial institutions--such as credit unions."
Mica said CUNA prefers that credit unions be able to turn to the NCUA for assistance, so that credit union funds can "help credit unions solve their own problems, with backup funding from Treasury if necessary."
"We again urge NCUA to implement a program for credit unions--by credit unions--that accomplishes the intent of the Emergency Economic Stabilization Act for the movement," he said.
During the Oct. 30 NCUA budget review meeting, CUNA urged the agency to consider such a program exclusively for credit unions. Use the resource link below to access the related story.
courtesy of cuna.org