Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
CUNA warns bankruptcy deal has unseen pitfalls
WASHINGTON (12/13/07)—Almost 500 credit unions, representing 36% of all credit union assets, could be adversely affected by a “manager’s amendment” to a mortgage bankruptcy bill that was scheduled for mark up Wednesday by the House Judiciary Committee, warned the Credit Union National Association (CUNA) Wednesday. In a letter to the committee chairman, Rep. John Conyers (D-Mich.), CUNA urged lawmakers to tailor the bill’s broad definition of “non-traditional mortgages” so that carefully underwritten credit union loans are not treated the same as the questionable subprime loans that have caused an upheaval in the subprime and mortgage markets. CUNA said that if such a modification were made, it could support the manager’s amendment to H.R. 3609, the Emergency Home Ownership and Mortgage Equity Protection Act. Under the provisions of the bill, loans falling under the definition contained in the bill could be subject to modification of terms by a bankruptcy judge. “This would impact almost 500 credit unions that have made ‘interest only’ loans in good faith and in response to member requests," CUNA wrote. "These are not subprime loans, but rather loans which were rigorously underwritten with full and clear disclosures. “Members of credit unions in housing markets such as California found these types of loans were necessary to allow them to purchase what, in many cases, would be classified as ‘starter homes.’" CUNA also told Conyers that credit unions appreciate the fact that the manager’s amendment includes provisions that indicate the bill will only apply to mortgages made within a defined time period and bankruptcy courts would only be able to use this temporary authority for seven years. "During our meetings with your staff, we indicated our flexibility with regard to the time period chosen to define loans subject to modification in bankruptcy," CUNA wrote. "Therefore, we can support the January 1, 2000-to-date-of-enactment period specified in the manager’s amendment. These provisions should address concerns about the potential long-term adverse effects of the legislation."


RSS print
News Now LiveWire
#FreeGasFriday courtesy of @tvfcu, TN #creditunions http://t.co/wDRFYJVlpz
20 hours ago
If you were unable to watch or attend @cuna 's @thehill Hill forum on Wed., you can now watch the archived version: http://t.co/FhUnp7HbU8
21 hours ago
Time is running out. If you haven't taken the #NewsNow readership survey, please click here now: http://t.co/4Gp6C2Wa4o
21 hours ago
African financial inclusion possible with mobile money: @IMFNews study http://t.co/0V5DTQToxY
22 hours ago
Louise Herring's birthday is Saturday. 105 years later, her legacy lives on through her kids http://t.co/oMqGADmo0d http://t.co/T3NmS9NqEY
23 hours ago