WASHINGTON A member of the House Financial Services Committee introduced a bill this morning that would allow the 120 privately insured credit unions to join the Federal Home Loan Banks.
Members in the 12 FHLBs is currently restricted to federally insured banks and credit unions, and to insurance companies.
The measure, which has been introduced in some form for at least ten years now, was sponsored by Rep. Steve Stivers, R-Ohio, home of ASI Inc., the only surviving private deposit insurer for credit unions.
Privately insured credit unions have been lobbying for years for access to the FLHBs’ low-cost mortgage funding but the push has been resisted by some lawmakers who worry about the private insurance backstop.
ASI is the lone survivor of what was once a network of two dozen private insurers for credit unions, most of which were wound down after the 1990 failure of Rhode Island Share and Deposit Insurance Corp., known as RISDIC, which caused a run on the state’s credit unions and a cascade of credit union failures.
