[Congressional Record Volume 161, Number 52 (Monday, April 13, 2015)]
[House]
[Pages H2119-H2120]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CAPITAL ACCESS FOR SMALL COMMUNITY FINANCIAL INSTITUTIONS ACT OF 2015
Mr. NEUGEBAUER. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 299) to amend the Federal Home Loan Bank Act to authorize
privately insured credit unions to become members of a Federal home
loan bank, and for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 299
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Capital Access for Small
Community Financial Institutions Act of 2015''.
SEC. 2. PRIVATELY INSURED CREDIT UNIONS AUTHORIZED TO BECOME
MEMBERS OF A FEDERAL HOME LOAN BANK.
(a) In General.--Section 4(a) of the Federal Home Loan Bank
Act (12 U.S.C. 1424(a)) is amended by adding at the end the
following new paragraph:
``(5) Certain privately insured credit unions.--
``(A) In general.--Subject to the requirements of
subparagraph (B), a credit union shall be treated as an
insured depository institution for purposes of determining
the eligibility of such credit union for membership in a
Federal home loan bank under paragraphs (1), (2), and (3).
``(B) Certification by appropriate supervisor.--
``(i) In general.--For purposes of this paragraph and
subject to clause (ii), a credit union which lacks Federal
deposit insurance and which has applied for membership in a
Federal home loan bank may be treated as meeting all the
eligibility requirements for Federal deposit insurance only
if the appropriate supervisor of the State in which the
credit union is chartered has determined that the credit
union meets all the eligibility requirements for Federal
deposit insurance as of the date of the application for
membership.
``(ii) Certification deemed valid.--If, in the case of any
credit union to which clause (i) applies, the appropriate
supervisor of the State in which such credit union is
chartered fails to make a determination pursuant to such
clause by the end of the 6-month period beginning on the date
of the application, the credit union shall be deemed to have
met the requirements of clause (i).
``(C) Security interests of federal home loan bank not
avoidable.--Notwithstanding any provision of State law
authorizing a conservator or liquidating agent of a credit
union to repudiate contracts, no such provision shall apply
with respect to--
``(i) any extension of credit from any Federal home loan
bank to any credit union which is a member of any such bank
pursuant to this paragraph; or
``(ii) any security interest in the assets of such credit
union securing any such extension of credit.
``(D) Protection for certain federal home loan bank
advances.--Notwithstanding any State law to the contrary, if
a Bank makes an advance under section 10 to a State-chartered
credit union that is not federally insured--
``(i) the Bank's interest in any collateral securing such
advance has the same priority and is afforded the same
standing and rights that the security interest would have had
if the advance had been made to a federally insured credit
union; and
``(ii) the Bank has the same right to access such
collateral that the Bank would have had if the advance had
been made to a federally insured credit union.''.
(b) Copies of Audits of Private Insurers of Certain
Depository Institutions Required To Be Provided to
Supervisory Agencies.--Section 43(a)(2)(A) of the Federal
Deposit Insurance Act (12 U.S.C. 1831t(a)(2)(A)) is amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii), by striking the period at the end and
inserting ``; and''; and
(3) by inserting at the end the following new clause:
``(iii) in the case of depository institutions described in
subsection (e)(2)(A) the deposits of which are insured by the
private insurer which are members of a Federal home loan
bank, to the Federal Housing Finance Agency, not later than 7
days after the audit is completed.''.
SEC. 3. GAO REPORT.
Not later than 18 months after the date of enactment of
this Act, the Comptroller General of the United States shall
conduct a study and submit a report to Congress--
(1) on the adequacy of insurance reserves held by a private
deposit insurer that insures deposits in an entity described
in section 43(e)(2)(A) of the Federal Deposit Insurance Act
(12 U.S.C. 1831t(e)(2)(A)); and
(2) for an entity described in paragraph (1) the deposits
of which are insured by a private deposit insurer,
information on the level of compliance with Federal
regulations relating to the disclosure of a lack of Federal
deposit insurance.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Texas (Mr. Neugebauer) and the gentleman from Massachusetts (Mr.
Capuano) each will control 20 minutes.
The Chair recognizes the gentleman from Texas.
[[Page H2120]]
General Leave
Mr. NEUGEBAUER. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days in which to revise and extend their remarks and
to add extraneous material on this bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. NEUGEBAUER. Mr. Speaker, I yield 5 minutes to the gentleman from
Ohio (Mr. Stivers), the sponsor of this bill.
Mr. STIVERS. I would like to thank the gentleman from Texas for
yielding me time.
Mr. Speaker, I rise in support of H.R. 299, the Capital Access for
Small Community Financial Institutions Act.
I would like to thank Chairman Hensarling and the other bill
sponsors--Mrs. Beatty from Ohio, Mr. Tiberi from Ohio, and Mr. Carson
from Indiana.
As you can hear, I lost my voice last night, but I am the voice for
1.2 million people who are currently denied access to the liquidity
that the Federal Home Loan Bank system offers inside financial
transactions.
This bill would simply make a small statutory change that would allow
nonfederally insured credit unions to apply for membership in the
Federal Home Loan Bank system. It would not guarantee their
memberships. They would go through the normal underwriting process like
any other applicant. The irony here is that every other credit union
can join the Federal Home Loan Bank system, and every other bank and
many nonbank entities, like insurance companies, are allowed to join
the Federal Home Loan Bank system. Only privately insured credit unions
are denied.
Currently, there are 128 small credit unions in nine States
representing 1.2 million people, including firefighters and teachers
and church workers and small business people, with total assets of $13
billion, people who are not insured by the Federal Government but who
are insured by a mutual private insurance company and so are denied
access to the Federal Home Loan Bank system. This bill would simply
change that and fix it.
Some important points are: one, there is no risk to the Federal Home
Loan Bank system. Two, no more than $4 billion of that $13 billion
could be pledged to the Federal Home Loan Bank system at any one time,
and that is if all 128 credit unions joined the Federal Home Loan Bank
system. Three, there is no concentration risk. There is no
disproportionate risk with these institutions.
I think it is really important that we give these 1.2 million people
the access to the liquidity that the Federal Home Loan Bank system
would offer them.
I would ask my colleagues to support this legislation, which would
give community financial institutions the ability to apply for
membership in the Federal Home Loan Bank system and which would provide
important liquidity to these 1.2 million people who might want to buy a
home or live the American Dream.
Again, I want to thank my cosponsor, who helped so hard to get this
bill done, Congresswoman Joyce Beatty from Ohio; and I want to thank
Chairman Neugebauer, Chairman Hensarling, and the other cosponsors of
the bill.
Mr. CAPUANO. Mr. Speaker, I yield such time as she may consume to the
gentlewoman from Ohio (Mrs. Beatty), who is the cosponsor of this bill.
Mrs. BEATTY. Thank you, Mr. Capuano, for yielding me time.
Thank you, Mr. Neugebauer and Mr. Stivers.
Mr. Speaker, I rise today in strong support of the Capital Access for
Small Community Financial Institutions Act of 2015, H.R. 299.
I join Congressman Steve Stivers in support of H.R. 299. My
colleagues on both sides of the aisle supported this bill in a
bipartisan fashion, a bill on which I am very proud to be the lead
Democrat. We have worked together to have H.R. 299 reported out of the
House Financial Services Committee with a vote of 56-1. In fact, last
year, the same bill passed unanimously on this House floor by 395-0.
Mr. Speaker, as you have heard, H.R. 299 would permit privately
insured credit unions to apply for membership in the Federal Home Loan
Bank system. A primary benefit of the Federal Home Loan Bank membership
is having access to low-cost secured funding, which is a tremendous
benefit to consumers. H.R. 299 would not, however, mandate the
privately insured credit unions to become members of a Federal Home
Loan Bank. Therefore, under this legislation, a Federal Home Loan Bank
would maintain the discretion to accept or to reject a privately
insured credit union's application for membership based on its risk
tolerance and underwriting guidelines.
Why do we need this bill?
H.R. 299 is an extremely important piece of legislation for these
privately insured credit unions because it would help give members and
businesses greater access to credit in a tight credit market.
Currently, there are approximately 6,400 credit unions across the
country, including some 128 to 130 privately insured credit unions. Of
that number of those privately insured credit unions, Mr. Speaker, 57
of them are actually in Ohio. Both I and Mr. Stivers, the sponsor of
the bill, are from the great State of Ohio. These 57 privately insured
credit unions in Ohio serve more than 333,000 members in Ohio, and,
roughly, 145,000 of those members are actually in my district.
Indeed, the Capital Access for Small Community Financial Institutions
Act of 2015, or H.R. 299, comes to the floor today because of the very
important role we believe that credit unions play in consumer lending
and homeownership across this country.
For instance, this bill would improve access to home mortgage loans
for members of three privately insured credit unions that are actually
based in my district, the Third Congressional District of Ohio. Those
are the Whitehall Credit Union, Producers Employee Credit Union, and
the Central Credit Union. Additionally, this legislation has garnered
support from the exclusive insurers of privately insured credit unions
across the country--American Share Insurance, or ASI. ASI, which is
based in central Ohio, which is just north of my district, continues to
provide employment for many Ohioans, and it has never previously had a
privately insured credit union depositor lose money.
Therefore, I urge the support of H.R. 299 because this bipartisan
legislation is good policy, is good for small credit unions, and may
spur the growth of small credit unions, which serve the needs of their
members, both individuals and businesses. Importantly, H.R. 299 has
bipartisan, nationwide support for local communities and businesses.
Mr. Speaker, I believe this legislation is a perfect example of the
type of regular order, committee-driven actions that we should use,
actually, as a template for bipartisan cooperation in the House and
which, indeed, if enacted, would bring real benefits to the national
housing market. I urge Members to vote ``yes'' on H.R. 299.
Mr. NEUGEBAUER. Mr. Speaker, I have no other speakers at this time,
and I reserve the balance of my time.
Mr. CAPUANO. Mr. Speaker, we have no further speakers. I would just
like to add my voice in support of this bill. It is a very commonsense
bill, and I am proud to be able to support it.
I yield back the balance of my time.
Mr. NEUGEBAUER. Mr. Speaker, I just want to echo the remarks that
have been made.
This is a commonsense bill. It helps Main Street, and it helps
consumers. There was a little glitch here in the marketplace when these
privately insured credit unions were not able to access the Federal
Home Loan Banks. It just makes sense that they do that. This bill
passed out of our committee 56-1. With that, I urge my colleagues to
pass this bill.
I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Byrne). The question is on the motion
offered by the gentleman from Texas (Mr. Neugebauer) that the House
suspend the rules and pass the bill, H.R. 299.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
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