Bipartisan bill would allow easier credit union membership to FHLBank system

Credit unions fully support legislation introduced Tuesday Reps. Vicente Gonzalez, D-Texas, and Brian Fitzpatrick, R-Pa., that would allow more credit unions to join the Federal Home Loan Bank system. 

FHLBank members have access to reliable, low-cost liquidity, as well as financial and community services and products. Currently, FHLB member financial institutions must hold 10% of their assets in residential mortgage loans, but Community Financial Institutions (CFIs) are exempt from this requirement.

The bill would specifically include credit unions in the CFI definition, expanding eligibility for FHLBank membership for more than 1,800 credit unions to join their regional FHLBank.

“America’s Credit Unions welcomes bipartisan legislation from Congressmen Vicente Gonzalez and Brian Fitzpatrick that would enhance credit unions’ ability to access the Federal Home Loan Bank system,” said America’s Credit Unions President/CEO Scott Simpson. “This bill is a common-sense solution that affirms what Congress has known for years, and that the Government Accountability Office recently confirmed: access to the FHLB system for small financial institutions improves their access to liquidity, lowering rates for consumers while maintaining their safety and soundness. Ultimately, expanding access to the FHLBs would benefit thousands of community-based credit unions and give them a powerful, safe tool to support homeownership, strengthen local communities, and help more people build financial security.”

“We appreciate the leadership of Reps. Vicente Gonzalez and Brian Fitzpatrick in recognizing that credit unions are vital community financial institutions,” said Jim Phelps, executive vice president and chief advocacy officer, Cornerstone League. Access to the Federal Home Loan Bank system strengthens our ability to provide mortgages, manage liquidity, and serve members in good times and bad.”

"We commend Representatives Fitzpatrick and Gonzalez for sponsoring this important legislation as a step toward ensuring credit unions have fair access to the Federal Home Loan Bank system,” said Patrick Conway, president/CEO CrossState Credit Union Association. When credit unions can fully participate in the FHLB, they are better positioned to expand mortgage lending, support local housing markets, and deliver long-term stability for the members and communities who rely on them. Expanding access strengthens not just credit unions, but the communities they serve.”