A Senate bill introduced this week would allow privately insured credit unions to offer loans through the Federal Home Loan Bank system.
Sens. Sherrod Brown (D-Ohio) and Rob Portman (R-Ohio) introduced the CUNA-supported legislation on Thursday.
“Brown and Portman’s legislation would provide more than 150 privately insured credit unions in nine states –including Ohio –access to additional forms of liquidity through membership in the FHLB system,” said a press release from the senators’ offices.
Under current law, non-federally insured credit unions are prohibited from participation due to a 1989 statutory change that expanded FHLB membership only to commercial banks and federally insured credit unions.
“This will make ts easier for Main Street credit unions to offer mortgages to families and loans to small business. Expanding the eligibility of the Federal Home Loan Bank System to privately-insured credit unions is long-overdue,” Brown said in a statement.
“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,” the Democrat from Cleveland said.
There are currently 12 banks and more than 8,000 member institutions in the FHLB system.
“This bill will help Ohio families and small businesses who continue to struggle through a weak economy by increasing their access to mortgages and loans to buy homes and office space,” said Portman, a Republican from Cincinnati.