WASHINGTON (11/19/08)—With all that is on his mind these days, U.S. Treasury Secretary Henry Paulson still managed to give credit unions the nod Tuesday for their continued lending efforts during the country’s current credit squeeze. Paulson was testifying before the House Financial Services Committee on the government’s economic stimuli efforts under the Emergency Economic Stabilization Act. He appeared before the panel along with Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair. Rep. Tom Price (R-Ga.), during a question period after Paulson’s testimony, said he had many smaller institutions in his district, such as credit unions and community banks, that would like to have access to TARP capital. Although he did not address credit union access to the TARP plan, Paulson did reply that they, in part, are key and will do a lot of lending. The Credit Union National Association (CUNA) has been asking federal lawmakers, as they consider additional economic recovery legislation, to increase credit unions' ability to be part of the solution for problems faced by consumers and small businesses. In letters to the leaders of the Senate Banking Committee and the House Financial Services Committee, CUNA has highlighted several regulatory changes it urges should be considered as part of an economic recovery plan. The letters recommend changes that would:
* Allow the National Credit Union Administration to implement a risk-based capital system for credit unions—similar to that of banks-- to help credit unions to better manage unexpected circumstances; * Eliminate the 12.25 % of assets credit union business lending cap as a means to provide much needed credit to America's small businesses without costing taxpayers a dime; and * Permit all credit unions to accept secondary capital.
(See related story: CUNA keeps CU message before Congress.)