[Congressional Record (Bound Edition), Volume 160 (2014), Part 5]
[House]
[Pages 6890-6892]
[From the U.S. Government Publishing Office, www.gpo.gov]




 CAPITAL ACCESS FOR SMALL COMMUNITY FINANCIAL INSTITUTIONS ACT OF 2014

  Mrs. CAPITO. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 3584) 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, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 3584

       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 2014''.

     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 a semicolon; 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 gentlewoman from 
West Virginia (Mrs. Capito) and the gentlewoman from California (Ms. 
Waters) each will control 20 minutes.
  The Chair recognizes the gentlewoman from West Virginia.


                             General Leave

  Mrs. CAPITO. Madam Speaker, I ask unanimous consent that all Members 
have 5 legislative days within which to revise and extend their remarks 
and submit extraneous materials for the Record on H.R. 3584, as 
amended, currently under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from West Virginia?
  There was no objection.
  Mrs. CAPITO. Madam Speaker, I yield myself such time as I may 
consume.
  I would like to thank the gentleman from Ohio (Mr. Stivers) and the 
gentlewoman from Ohio (Mrs. Beatty) for their efforts in drafting the 
legislation before us this afternoon.
  The Capital Access for Small Community Financial Institutions Act is 
bipartisan legislation that passed the House Financial Services 
Committee by a vote of 55-0 earlier this spring. This bill will provide 
meaningful regulatory relief for privately insured credit unions by 
allowing them to become members of the Federal Home Loan Bank system.
  There are approximately 130 privately insured credit unions, with 
nearly $13 billion in assets in nine States across the country. These 
credit unions currently cannot join the Federal Home Loan Bank system, 
which provides an additional source of mortgage funding for its 
members. Allowing privately insured credit unions to join the Federal 
Home Loan Bank system will allow these credit unions to increase the 
availability of mortgage credit in the communities that they serve.
  I commend the office for identifying this inequity and putting forth 
this legislation. This issue is not new. Similar provisions were 
included in the previous regulatory relief measures that passed the 
House with overwhelming support.
  I urge my colleagues to support this legislation, and I reserve the 
balance of my time.
  Ms. WATERS. Madam Speaker, I yield myself such time as I may consume.
  I rise to support H.R. 3584, a bill that permits credit unions 
insured by private companies access to the Federal Home Loan Bank 
system. Today, there are 132 credit unions with approximately $13 
billion in assets that cannot access additional liquidity for mortgage 
credit but for a statutory obstacle requiring credit unions to have 
Federal insurance. With membership, privately insured credit unions 
will be able to offer their members mortgages at more affordable rates 
and other products, which, in turn, helps many communities across the 
country.
  In the past, some Members raised concerns that the home loan banks 
should only serve federally insured institutions, but I believe that 
those concerns have been largely addressed with the adoption of several 
helpful amendments both before and during the committee markup of this 
bill.
  Mrs. Beatty, for example, worked with Mr. Stivers to address some of 
the concerns of the Federal credit union regulator. In addition, the 
gentleman from New York (Mr. Meeks) offered two amendments to better 
protect the Federal Home Loan Bank system against a bank run among 
privately insured credit unions.
  All that being said, these credit unions and their private insurer 
fared remarkably well during the last financial crisis even as many of 
their federally insured counterparts failed. As a

[[Page 6891]]

result, these credit unions helped bolster many communities through the 
economic downturn.
  So I would like to thank the sponsors of this bill, Mr. Stivers as 
well as his Democratic cosponsor Mrs. Beatty, for all of their efforts 
to work across the aisle to assist community financial institutions and 
their members.
  I support the adoption of H.R. 3584, and I reserve the balance of my 
time.
  Mrs. CAPITO. Madam Speaker, I would now like to yield such time as he 
may consume to the gentleman from Ohio (Mr. Stivers), the author of 
this bill.
  Mr. STIVERS. Madam Speaker, I would thank the gentlelady from West 
Virginia for her support.
  I rise in support of H.R. 3584, the Capital Access for Small 
Community Financial Institutions Act. This bill simply makes a 
statutory change that would allow nonfederally insured credit unions 
the right to apply for membership with the Federal home loan banks. It 
does not guarantee that they would receive membership. They would have 
to go through the membership application like everyone else. Similar 
legislation passed the House in 2006, with a bipartisan vote of 415 
for, none against.
  Purchasing a home is part of the American Dream, and this bill will 
help these small credit unions be able to make more mortgage loans as 
they use the Federal Home Loan Bank for liquidity and help more people 
live the American Dream. This bill would help those credit unions be 
able to have the liquidity that they don't have today.
  The Federal Home Loan Bank, which was established in 1932, has been 
an important part of credit and liquidity for mortgage lending for the 
past 80 years for most Main Street institutions. Unfortunately, 132 
small credit unions don't have that support right now. While most large 
and small institutions who are members of the Federal Home Loan Bank 
are able to use it every day for liquidity and to serve their 
customers, these 132 small credit unions in nine States with assets 
that total about $11 billion are left out because of a glitch in the 
law.
  There will not be any additional risk to the Federal Home Loan Banks 
as a result of this. No more than $4 billion would be pledged, 
probably, as a result of this. So there is no real concentration risk.
  I do want to thank Mr. Meeks from New York for his amendments that 
helped strengthen the bill. And while these credit unions don't have, I 
think, much risk to the institution, I think Mr. Meeks' amendments will 
ensure that the Federal Home Loan Bank is never put at risk by the 
authorizing language in this legislation.
  You know, credit unions didn't have Federal insurance until the 
1970s, and many small credit unions have continued to have private 
insurance and remain State-regulated. Those are the institutions we are 
talking about today, and there is precedent for institutions like them 
to join the Federal Home Loan Bank. So I believe that it is appropriate 
to allow them to not be discriminated against and allow them to use the 
Federal Home Loan Bank and ensure that they can serve their customers 
the same way other Main Street banks and credit unions can.
  Again, this bill does not guarantee that any institution will become 
a member of the Federal Home Loan Bank; it simply gives them the 
ability to apply.
  I want to thank Mrs. Beatty from Columbus, Ohio, and Ranking Member 
Waters for their support in the Financial Services Committee. I want to 
thank Mrs. Capito and Mr. Meeks for working with me on this bill.
  As you heard, this bill passed the Financial Services Committee by a 
vote of 55-0. I would ask my colleagues to support this legislation and 
correct an oversight that doesn't allow these institutions to use the 
Federal Home Loan Bank and doesn't allow many of their customers to 
live the American Dream. So hopefully we can correct that today by 
supporting this.
  Ms. WATERS. Madam Speaker, I yield such time as she may consume to 
the gentlelady from Ohio (Mrs. Beatty), the coauthor of H.R. 3584.
  Mrs. BEATTY. Madam Speaker, I would like to thank Ranking Member 
Waters for all of her support and her leadership.
  Madam Speaker, I rise today in strong support of H.R. 3584, the 
Capital Access for Small Community Financial Institutions Act, as 
amended.
  Today I stand here, joining my colleague from Ohio, Congressman Steve 
Stivers, in support of final passage of this bipartisan legislation. I 
thank the gentleman for introducing this bill on which I partnered as 
the lead Democrat. In a show of bipartisanship, we were able to work 
together to have the legislation unanimously reported out of the 
Financial Services Committee, as it is certainly worth noting again, 
with a vote of 55-0.
  Madam Speaker, H.R. 3584, if enacted, would permit privately insured 
credit unions to apply for membership in the Federal Home Loan Bank 
system. It would not, however, mandate that these privately insured 
credit unions become members of the Federal Home Loan Bank. Currently, 
out of roughly some 6,000 credit unions across the country, there are 
132 privately insured credit unions operated in nine States. These 
States include Alabama, California, Idaho, Illinois, Indiana, Maryland, 
Nevada, my home State of Ohio, and Texas.
  In particular, this bill would improve access to home mortgage loans 
for members of the three privately insured credit unions that are based 
in my Third Congressional District of Ohio. H.R. 3584 is an extremely 
important piece of legislation for these privately insured credit 
unions because it will help give members and businesses greater access 
to credit in a tight credit market.
  Additionally, this legislation would also benefit the exclusive 
insurers of privately insured credit unions across the country, which 
are based in central Ohio, just north of my congressional district, 
which provide employment for many Ohioans.

                              {time}  1645

  In addition, Madam Speaker, in order to ensure the best-drafted bill, 
Congressman Meeks and I offered amendments that were accepted during 
the committee markup.
  My amendment does two things. First, it removes any language 
referencing the National Credit Union Administration from the text of 
the legislation--clarifying that this legislation would not grant any 
supervisory jurisdiction to the NCUA over privately insured credit 
unions.
  Secondly, it created a Government Accountability Office study and 
report to Congress on the adequacy of insurance reserves held by the 
private insurer of these credit unions and also on the compliance of 
these credit unions with Federal regulations requiring consumers to 
receive disclosures explaining that such credit unions are privately--
not federally--insured.
  These changes were supported by the NCUA and unanimously by the 
entire Financial Services Committee.
  Indeed, H.R. 3584, the Capital Access for Small Community Financial 
Institutions Act, as amended, comes to the floor today because of the 
efforts of many members of the Financial Services Committee who worked 
to advance the legislation through regular order of the committee.
  I would urge support of H.R. 3584 because this bipartisan legislation 
is good policy, it is good for small credit unions, and it is an easy 
and effective way to demonstrate bipartisan, nationwide support for 
local communities and businesses.
  Madam Speaker, I believe this legislation is a perfect example of the 
type of regular order, committee-driven action that we should use as a 
template for bipartisan cooperation in the House, and which, if 
enacted, would bring real benefits to the national housing markets. I 
urge all of the Members to vote ``yes'' on H.R. 3584, as amended.
  Mrs. CAPITO. Madam Speaker, I have no further speakers. I am prepared 
to close, so if the gentlelady would like to close, then I will follow.
  Ms. WATERS. Madam Speaker, I simply ask for support for this 
important legislation, and I commend both

[[Page 6892]]

Mr. Stivers and Mrs. Beatty for the wonderful job that they did in 
providing the kind of leadership that brought both sides of the aisle 
together. I would simply ask for support, and I yield back the balance 
of my time.
  Mrs. CAPITO. I want to thank both the sponsors, as well, and the 
committee chair and Ms. Waters for her work on this bill. I echo her 
sentiments. I would like to urge support and yield back the balance of 
my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from West Virginia (Mrs. Capito) that the House suspend the 
rules and pass the bill, H.R. 3584, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. GOHMERT. Madam Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

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