WASHINGTON — Bipartisan legislation was introduced Thursday to give privately insured credit unions access to the Federal Home Loan Bank (FHLB) system.
Sens. Sherrod Brown (D-Ohio) and Rob Portman (R-Ohio) introduced a bill that would end the prohibition against privately insured credit unions from becoming FHLB members — a rule that stems from a 1989 statutory change that expanded FHLB membership only to commercial banks and federally insured credit unions.
FHLB access gives privately insured credit unions liquidity needed to make more loans to members and local businesses.
Brown said that the change is needed and overdue, pointing out that 150 credit unions in nine states would benefit.
"By providing these financial intuitions with the ability to join the federal home loan bank system, we help these community institutions keep more local dollars invested in local communities," Brown said.
The Ohio CU League and CUNA are supporting the legislation.
Early in December, Rose Bartolomucci, president and CEO of Towpath Credit Union, testified before the House Committee on Financial Services on behalf of CUNA to advocate for regulatory relief for the credit union community, including addressing that privately insured credit unions need access to the FHLB.
Bartolomucci, whose $114-million asset credit union is based in Akron, Ohio, is the former deputy superintendent for credit unions for her state's Department of Commerce. (Dublin, Ohio, is also the headquarters of American Share Insurance Inc., the last surviving private insurer of credit union deposits.)
