FOM modernization bill is free-market solution to address financial access

May 16, 2022

CUNA wrote in support of several bills scheduled to be marked up by the House Financial Services Committee Tuesday, including the Expanding Financial Access for Underserved Communities Act (H.R. 7003). CUNA, the American Association of Credit Union Leagues, and all Leagues wrote to the committee in support of the bill as well.

[The bill] would give communities, small businesses and individuals who have lost access to affordable financial services – or perhaps have never had sufficient access to such – easier access to federal credit unions,” the letter reads.

Specifically, it would:

  • Allow all federal credit unions to add underserved areas to their field of membership.
  • Exempt business loans made by credit unions in underserved areas from the credit union member business lending cap.
  • Expand the definition of an underserved area to include New Markets Tax Credit areas and any area that is more than ten miles from the nearest financial institution branch.

“Voting for this legislation is a step toward a free-market solution that addresses affordable access to financial services; voting against this legislation is an endorsement of the status quo where every day bank branches close, banking deserts are created, and consumers and small businesses lose access to mainstream financial services,” it adds.

CUNA added that the only known opposition to H.R. 7003 is from the banking industry, which CUNA notes “reveals their true colors: first, they abandon underserved communities and then they try to keep credit unions out.”

The letter also notes CUNA support for:

  • The Close the ILC Loophole Act (H.R. 5912), which would prevent further exploitation of the industrial loan company (ILC).
  • The CDFI Bond Guarantee Improvement Act of 2022 (H.R. 7733), which would modify and permanently authorize the CDFI Bond Guarantee Program and make it more accessible to smaller CDFI credit unions.

CUNA also wrote about concerns with the Strengthening Cybersecurity for the Financial Sector Act of 2021 (H.R. 7022), which would extend NCUA additional supervisory authority over third-party vendors.

CUNA is concerned this could lead to increased costs for NCUA to hire personnel but notes its willingness to engage with NCUA and members of Congress on the issue of credit union cybersecurity.