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NCUA asks Geithner for TARP aid for CUS
ALEXANDRIA, Va. (1/28/09)—As Timothy Geithner assumed his new job as U.S. Treasury Secretary, he was contacted Tuesday by the federal credit union regulator about asset relief funds for credit unions. In a letter Tuesday, National Credit Union Administration (NCUA) Chairman Michael Fryzel congratulated Geithner on his successful appointment and called upon the Secretary to expand options for credit union participation in the Troubled Assets Relief Program (TARP). “Knowing of your commitment, and that of President Obama, to reforming the Troubled Assets Relief Program, I request that you take a fresh look at two of the issues of the greatest concern to me as the federal regulator with responsibility for the safety and soundness of the credit union system,” wrote Fryzel. Fryzel asked Geithner to reconsider two issues in particular. Fryzel specifically identified past decision by the Treasury Department not to institute an illiquid-asset-purchase feature of TARP. He also noted an absence of guidelines for participation for cooperatives such as credit unions “Although I can understand the initial actions that the Treasury Department has taken to help the large banks, insurance companies, and other major financial institutions that have faltered or failed, I am concerned about the second-place status into which credit unions and other smaller financial institutions have been placed,” noted the NCUA chairman. Fryzel additionally addressed the need for the Treasury to allow the National Credit Union Share Insurance Fund to establish a guarantee for credit union deposits in non-interest bearing transaction accounts, parallel to authority granted to the Federal Deposit Insurance Corp. He also asked the Secretary to “bear in mind the key role played by credit unions and credit union members in our financial system as you reevaluate the Federal response to the ongoing economic crisis.” Use the resource link below to read the complete letter.
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