WASHINGTON (3/13/14)--Allowing privately insured credit unions to apply for Federal Home Loan Bank system membership "will provide a valuable source of liquidity and enhance their lending operations to the benefit of the members and the communities in which they reside," the Credit Union National Association stressed in a letter sent Wednesday to key lawmakers.
The CUNA letter was submitted prior to a scheduled markup today of Rep. Steve Stivers' (R-Ohio) bill, H.R. 3584. The bill is expected to be considered by the House Financial Services Committee, and the letters were sent to the committee chairman, Rep. Jeb Hensarling (R-Texas), and its ranking Democrat, Rep. Maxine Waters (D-Calif.).
The bill would create no additional risk of loss to any FHLB or to taxpayers, CUNA President/CEO Bill Cheney assured in his letter.
Although the National Credit Union Administration historically has raised concerns with private share insurance, CUNA's letter suggested tweaks to the Stivers bill that should address the agency's concern.
CUNA said it would back a modification to the underlying bill--requested by the NCUA-- to clarify that the "NCUA has no legal authority, no regulatory power and no supervisory jurisdiction over either privately insured credit unions or commercial insurance companies."
Privately insured credit unions would not be the first type of non-federally insured institution to be eligible for FHLB System membership, Cheney reminded. "Under current law, insurance companies, which are not federally insured, may join the FHLB System. And, in fact, insurance companies borrow more from the FHLB System than all credit unions," Cheney said.
In a separate letter, CUNA also joined with the state credit union leagues of states most affected by the bill to show support.
CUNA cosigned a letter with the California & Nevada Credit Union Leagues, the Cornerstone Credit Union League, the Idaho Credit Union League, the Illinois Credit Union League, the Indiana Credit Union League, the League of Southeastern Credit Unions & Affiliates and the Maryland & D.C. Credit Union Association.
Stivers' bill addresses one of the more than 30 regulatory relief proposals CUNA submitted to the committee at a hearing last year. A vote on the bill could be held as soon as Friday morning. Federally insured credit unions already have the ability to apply for FHLB system membership.
For both letters, use the resource links.