Bills to reform the Federal Home Loan Bank System and expand credit union membership were introduced by key lawmakers this week.
Rep. Richard Baker, R-La., sponsored legislation allowing the Federal Home Loan banks to make advances for community and economic development lending.
"The Federal Home Loan Bank System needs some fine-tuning to enable it to continue meeting the needs of all its members in a rapidly changing marketplace," Rep. Baker said on the House floor Tuesday.
The bill is identical to a proposal he introduced last year. That plan stalled because of objections from House Banking Committee Chairman Jim Leach and the Treasury Department.
An aide to Rep. Baker said the bill will be revised during the next two months. Rep. Baker is chairman of House Banking's capital markets, securities, and government sponsored enterprises subcommittee.
His bill, co-sponsored by Rep. Paul Kanjorski, D-Pa., would make membership in the system voluntary, even for thrifts, and eliminate the cap on advances to commercial banks.
Legislation sponsored by Rep. Martin Frost, D-Tex., would let credit unions stretch beyond their original membership group to serve low-income areas.
Rep. Frost is one of the senior Democrats on the House Rules Committee. "Credit unions have indicated their willingness to go into areas which are currently unserved by banks," he said in a prepared statement. "Those areas are primarily poor and minority, and this bill will grant residents of those neighborhoods access to modern financial services."
The bill would weaken a recent federal court decision that prohibits credit unions from expanding beyond their "core" membership. The Supreme Court is expected to decide by Jan. 17 whether to review the ruling.
"I believe the current situation denies a sizable segment of the population access to services most of us take for granted," Rep. Frost said. "That has to be changed."