Fryzel Welcomes Geithner, Requests TARP Aid for Credit Unions
January 27, 2009, Alexandria, Va. -- National Credit Union Administration Chairman Michael E. Fryzel today congratulated newly confirmed Treasury Secretary Timothy F. Geithner on his assumption of office 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 (TARP), 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,” stated Chairman Fryzel. He specifically identified past Treasury Department decisions to not institute the illiquid asset purchase feature of TARP, and the absence of guidelines for participation for cooperatives such as credit unions, as issues that should be reconsidered by Secretary Geithner.
“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 Chairman Fryzel.
Additionally, Fryzel addressed the need for the Treasury Department 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 FDIC. 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.”
Fryzel Letter to Secretary Geithner
The National Credit Union Administration regulates, charters and supervises federal credit unions. NCUA, with the backing of the full faith and credit of the U.S. government, also operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of nearly 89 million account holders in all federal credit unions and the majority of state-chartered credit unions.
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