Legislation would prevent further exploitation of ILC loophole

Congress should act to close the industrial loan company (ILC) loophole, CUNA wrote the House Financial Services Committee Tuesday. CUNA wrote the committee before its markup of several bills, including the Close the ILC Loophole Act (H.R. 5912)

“We support the passage of H.R. 5912 to prevent the further exploitation of the loophole by firms seeking to gain all of the advantages of an FDIC-insured bank charter without the concomitant supervision and regulation that Congress has established for the corporate owners of full-service insured banks,” the letter reads.

CUNA also wrote in support of the Downpayment Toward Equity Act of 2021 (H.R. 4495), asking the committee to ensure credit unions that serve underserved areas are explicitly eligible under the legislation.

“Credit unions recognize the importance of addressing the racial homeownership gap and support efforts to establish a down-payment assistance program that will assist first-generation homebuyers and low-income borrowers become homeowners,” the letter reads. “We support the ability to layer state assistance and the criteria the bill establishes regarding area median income (AMI) which will hopefully allow access for borrowers in high-cost areas.”

CUNA also wrote in opposition of legislation making changes to overdraft programs, noting that financial institutions such as credit unions are better positioned to determine the future of overdraft protections, not restrictive legislation.