WASHINGTON (3/17/14)--Voting 55-0, the House Financial Services Committee passed a bill Friday to broaden credit unions' ability to apply for Federal Home Loan Bank membership.

The bill is strongly supported by the Credit Union National Association to put the country's privately insured credit unions on the same footing as their federally insured counterparts where it comes to membership in the Federal Home Loan Bank system.

The bill was one of three passed over two days, all strongly supported by CUNA, the state credit union leagues and credit unions across the country, that--when they become law--will potentially provide significant relief for  credit unions from their regulatory burden.

Together with National Flood Insurance Program reforms passed Thursday by the Senate and a bill to make changes to the  operating structure of the Consumer Financial Protection Bureau also approved Friday morning by House Financial Services--CUNA says the bills will help credit unions by cutting costs, increasing their voice in the regulatory process, and giving credit unions more flexibility to fund mortgage lending. (See related story: CFPB restructure bill moves through committee.)

In a markup session Thursday for the FHLB bill, House Financial Services Committee Chairman Jeb Hensarling said approval of the bill (H.R. 3584) would correct a "drafting oversight" that occurred years ago.

The new bill, introduced by Rep. Steve Stivers' (R-Ohio), amends the Federal Home Loan Bank Act to authorize privately insured credit unions to become members of an FHLB.

CUNA urged committee leaders in a letter Wednesday to vote in favor of the Stivers' bill.

CUNA noted that the bill would create no additional risk of loss to any FHLB or to taxpayers. In the Thursday committee markup session Stivers underscored that there is only $11 billion total in privately insured credit union assets. And Rep. Joyce Beatty (D-Ohio), a bill co-sponsor, noted that the bill only affects credit unions in nine states, and they represent less than 2% of all credit unions in the U.S.

The bill states that a privately insured credit union will be considered to have met the eligibility criteria for Federal Home Loan Bank membership if, six months after its application date, the state supervisor has failed to act upon the application.

If H.R. 3584 is approved by the full House, it would then move to the Senate for consideration.