The National Association of Federal Credit Unions is lauding a bipartisan bill that would grant credit unions parity with banks under Federal Home Loan Bank membership criteria.
NAFCU Vice President of Legislative Affairs Brad Thaler said the legislation introduced by Reps. William Lacy Clay, D-Mo., and Randy Neugebauer, R-Texas, the ranking member and chairman of the House Financial Institutions and Consumer Credit Subcommittee, is a big help for credit unions, especially smaller ones.
“We thank Chairman Neugebauer and Ranking Member Clay for their leadership on this issue,” Thaler said. “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.”
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. The statutory change would ensure credit unions parity under any final rule changes by the Federal Housing Finance Agency in the FHLB membership criteria.
The Federal Housing Finance Agency 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 percent of their assets in residential mortgage loans on an ongoing basis. Current rules apply this threshold only at application for FHLB membership. NAFCU raised concerns about the proposal in January.
A similar provision was included in the Financial Regulatory Improvement Act passed by the Senate Banking Committee on Thursday.
The Senate Committee on Banking, Housing and Urban Affairs passed “The Financial Regulatory Improvement Act of 2015" would require the Federal Housing Finance Agency to withdraw its proposed rule revising Federal Home Loan Bank membership requirements while GAO studies the issue, and grant credit unions parity with community banks in the definition of community financial institutions under the Federal Home Loan Bank Act.