Sens. Sherrod Brown (D-Ohio) and Rob Portman (R-Ohio) introduced legislation last week intended to allow credit unions to more easily offer loans through the Federal Home Loan Bank system.
Under current rules privately insured credit unions do not have access to the FHLB system, preventing the institutions from receiving secured loans to make to their members—a 1989 statutory change that extended FHLB membership only to commercial banks and federally insured credit unions.
“This will make is easier for Main Street credit unions to offer mortgages to families and loans to small business,” Brown said. “Expanding the eligibility of the Federal Home Loan Bank System to privately-insured credit unions is long-overdue. By providing these financial intuitions with the ability to join the Federal home loan bank system, we help these community institutions keep more local dollars invested in local communities.”
Brown and Portman said the legislation, which has support from the Credit Union National Association and Ohio Credit Union League, would allow more than 150 privately insured credit unions in nine states to access the FHLB system, which is comprised of 12 banks and more than 8,000 members.
“This bill will help Ohio families and small businesses who continue to struggle through a weak economy by increasing their access to mortgages and loans to buy homes and office space,” Portman said.