CUNA and NAFCU wrote lawmakers this week that the language in the financial overhaul bill that would limit the Federal Home Loan Bank Board to a 25% concentration limit would limit their ability to meet their obligations to their members.
The associations are trying to influence legislation that the Senate is likely to begin discussing next week, which would change how the government regulates financial firm.
CUNA President/CEO Dan Mica wrote that the limit could restrict the access of some credit unions to funds and "would ultimately drive the cost up for participating credit unions on both sides of the limit."
The bill passed by the House last year exempts FHLBs from concentration limits.
NAFCU President/CEO Fred Becker wrote that if the language in the Senate bill were passed into law it would mean that more than $300 billion in liquidity provided by FHLBs would stop flowing into the economy and reduce FHLB funding by 50%.
Senate leaders are negotiating on the provisions of the bill and Senate Majority Leader Harry Reid (D-Nev.) has scheduled the first procedural vote on Monday on whether to bring the measure to floor.