CUNA Split on Congress Cramdown Proposals

Credit Union National Association officials are saying they support a possible Senate compromise on bankruptcy cramdown legislation, but they continue to oppose a bankruptcy bill that the House of Representatives is slated to vote on this Thursday (Feb. 26). "Senators Evan Bayh (D-Ind.) and Arlen Specter (R-Penn.) appear to agree with the approach that CUNA has advocated for over a year now," a top CUNA official told credit union executives at their annual legislative conference. He noted the two senators are working on a bill that would limit the "scope, application and duration" of bankruptcy mortgage relief. But the bill approved by the House Judiciary Committee, which allows judges to reduce or cram down the principal amount of a residential mortgage, would encourage everyone who has a mortgage to game the system. "The good mortgages you made shouldn't be subject to cramdown," he said.