NEW: House passes bill to allow privately insured CUs to join FHLB

April 13, 2015
WASHINGTON (4/13/15 UPDATED 4:25 p.m. ET)--The U.S. House just passed the Capital Access for Community Financial Institutions Act of 2015 by a voice vote, a stand-alone credit union relief bill meant to correct a drafting error that negatively affected some credit unions.

CUNA has strongly advocated for this legislation and sent a letter to House Speaker John Boehner (R-Ohio) and Minority Leader Nancy Pelosi (D-Calif.)  prior to the successful vote.

The bill, H.R. 299, would allow privately insured credit unions to join the Federal Home Loan Bank program.

The FHLB system was opened to credit unions and commercial banks in 1989, but the bill that allowed this was drafted in such a way to apply only to an "insured credit union" as defined under the Federal Credit Union Act.

This blocked state-chartered, privately insured credit unions from applying to become members of the FHLB system.

Rep. Steve Stivers (R-Ohio) said prior to the vote that the bill would give 1.2 million credit union members greater access to credit. Rep. Joyce Beatty (D-Ohio) echoed those thoughts, adding that of the 128 privately insured credit unions, 57 of them are in Ohio, and they serve more than 333,000 members.

Rep. Michael Capuano (D-Mass.) and Rep. Randy Neugebauer (R-Texas) said the bill is a common sense piece of legislation, and several legislators noted the bipartisan, nationwide support the bill has received.

The FHLB system helps its members meet lending demand with respect to mortgages and other loans that satisfy certain collateral requirements. For credit unions, the system can provide a much needed source of additional liquidity.

A version of H.R. 299 passed the House in 2004, 2006 and 2014.

The House also passed the Privacy Notice Modernization Act (H.R. 601) by a voice vote. See tomorrow's News Now for coverage of additional regulatory relief bills voted on by the House.