WASHINGTON—Legislation that would grant credit unions parity with banks under the Federal Home Loan Bank membership criteria has been introduced in Congress.
The bill is being co-sponsored by Reps. William Lacy Clay (D-MO) and Randy Neugebauer (R-TX), the ranking member and chairman of the House Financial Institutions and Consumer Credit Subcommittee.
The bill would revise the Federal Home Loan Bank Act definition of a “community financial institution” to include small credit unions—those with less than $1.1 billion in assets—and would ensure credit unions parity under any final rule changes by the Federal Housing Finance Agency in the FHLB membership criteria.
As NAFCU noted, FHFA has proposed changes in the criteria that would, among other things, require FHLB member institutions—all except “community financial institutions”—to maintain at least 10% of their assets in residential mortgage loans on an ongoing basis. Current rules apply this threshold only at application for FHLB membership.
NAFCU VP-Legislative Affairs Brad Thaler said the trade group strongly supports the bill.
“We thank Chairman Neugebauer and Ranking Member Clay for their leadership on this issue,” said Thaler. “Many credit unions look to the Federal Home Loan Banks for mortgage liquidity, and this bill would help ensure that access. We look forward to working with the lawmakers and their staffs toward enactment of this important measure.”
Congress is in recess this week.