The House Financial services Committee voted 55-0 last week to pass legislation that would allow privately insured credit unions to become members of a Federal Home Loan Bank—government-sponsored banks that provide discount funding to financial institutions.
H.R. 3584, which was introduced by Rep. Steve Stivers (R-Ohio), would expand credit unions’ ability to apply for membership at one of the 12 national FHLBs.
FSC Committee Chairman Jeb Hensarling (R-Texas) said approval of the legislation would remedy a “drafting oversight” present in the initial statute.
Under the legislation, privately insured credit unions would be considered to have met the criteria for membership in the FHLB system if its state supervisor does not act upon the application within the six months following the application date.
During the markup session last Thursday, bill co-sponsor Rep. Joyce Beatty (D-Ohio) said the legislation would only affect credit unions in nine states that represent less than two percent of all credit unions nationwide.
FHLBs sponsor the Affordable Housing Program and Community Reinvestment Programs—programs aimed at meeting the credit needs of low- to moderate-income families.