Momentum Builds For Credit Union-Specific Bailout

With increasing portions of the $700 billion TARP bailout money being earmarked for banks and even insurance companies, credit unions are looking to develop a rescue plan of their own, according to a report in The Credit Union Journal. The Credit Union National Association, the largest trade group representing CUs, is calling on its regulator, the National Credit Union Administration, to create a "shadow" asset relief program that would purchase distressed mortgage loans and mortgage-backed securities from credit unions. (TARP stands for Troubled Asset Relief Program and was legislated into existence under the Emergency Economic Stabilization Act.) This effort would include corporate credit unions, which are sitting on more than $10 billion of losses on MBS, the newspaper reported. The program would be managed by the National CU Share Insurance Fund, which already provides emergency loans to troubled credit unions.