WASHINGTON (5/19/15, UPDATED 1:00 p.m. ET)--Legislation introduced by Sens. Joe Donnelly (D-Ind.) and Rob Portman (R-Ohio) Monday evening would allow privately insured credit unions to apply for Federal Home Loan Bank (FHLB) membership.
“As the only type of credit union excluded from membership into the Federal Home Loan Bank system, this common sense legislation would expand access to credit and other vital services for members of privately-insured credit unions,” said Donnelly, a member of the Senate Banking Committee.
S. 1367 would provide privately-insured credit the opportunity to gain FHLB membership benefits such as increased liquidity, lower cost borrowing and increased mortgage lending. Federally-insured credit unions have been eligible for FHLB membership for more than two decades.
A similar bill, the Capital Access for Small Community Financial Institutions Act of 2015 (H.R. 299), passed the House unanimously last month. CUNA supported the bill, calling it an important step in the right direction for credit union parity.
John McKenzie, president of the Indiana Credit Union League, said the legislation is much appreciated. In Indiana alone, there are 16 state-chartered credit unions with more than 140,000 members and $2.2 billion in assets that are privately insured.