Two years after the financial crisis, the federal government guaranteed $30 to $35 billion in bonds to save credit unions. WSJ reported:
Regulators announced Friday a rescue and revamping of the nation's wholesale credit union system, underpinned by a federal guarantee valued at $30 billion or more.Backed by shaky mortgage-related assets? Which of $3.7 trillion in government programs was supposed to help with mortgage related assets, TARP, PPIP, HAMP or any other acronym jumble? Here's the federal take:
Friday's moves include the seizure of three wholesale credit unions, plus an unusual plan by government officials to manage $50 billion of troubled assets inherited from failed institutions. To help fund the rescue, the National Credit Union Administration plans to issue $30 billion to $35 billion in government-guaranteed bonds, backed by the shaky mortgage-related assets.
"Previously, we stabilized the system, and now we're resolving the problem and reforming the system," said Debbie Matz, chairman of the National Credit Union Administration, the U.S. agency overseeing credit unions.
Nice try, Debbie. Fifty billion in troubled assets, it sounds like we're still at the stabilization phase. Uncle Sam might be the only functioning lender, given $30 billion for credit unions, another $30 billion for small businesses, and $50 billion in GM. This is while banks fail at a record rate. It remains to be seen if the program costs taxpayers anything.
