[House Report 109-38]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     109-38

======================================================================



 
           EXPANDED ACCESS TO FINANCIAL SERVICES ACT OF 2005

                                _______
                                

 April 12, 2005.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Oxley, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 749]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 749) to amend the Federal Credit Union Act to 
provide expanded access for persons in the field of membership 
of a Federal credit union to money order, check cashing, and 
money transfer services, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
Performance Goals and Objectives.................................     3
New Budget Authority, Entitlement Authority, and Tax Expenditures     3
Committee Cost Estimate..........................................     3
Congressional Budget Office Estimate.............................     4
Federal Mandates Statement.......................................     4
Advisory Committee Statement.....................................     4
Constitutional Authority Statement...............................     5
Applicability to Legislative Branch..............................     5
Section-by-Section Analysis of the Legislation...................     5
Changes in Existing Law Made by the Bill, as Reported............     5

    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Expanded Access to Financial Services 
Act of 2005''.

SEC. 2. CHECK CASHING AND MONEY TRANSFER SERVICES OFFERED WITHIN THE 
                    FIELD OF MEMBERSHIP.

  Paragraph (12) of section 107 of the Federal Credit Union Act (12 
U.S.C. 1757(12)) is amended to read as follows:
          ``(12) in accordance with regulations prescribed by the 
        Board--
                  ``(A) to sell, to persons in the field of membership, 
                negotiable checks (including travelers checks), money 
                orders, and other similar money transfer instruments 
                (including international and domestic electronic fund 
                transfers); and
                  ``(B) to cash checks and money orders and receive 
                international and domestic electronic fund transfers 
                for persons in the field of membership for a fee;''.

                          Purpose and Summary

    H.R. 749 amends the Federal Credit Union Act (12 U.S.C. 
1757(12)) to permit federal credit unions to offer check 
cashing and money transfer services to non-members of the 
credit union as long as the individual is within the credit 
union's field of membership. The bill is designed to lower the 
costs paid by consumers for these services through increased 
competition in the marketplace.

                  Background and Need for Legislation

    The past decade has witnessed aggressive outreach by both 
the public and private sectors to groups that have historically 
chosen to conduct their financial affairs outside the 
traditional banking system. Although estimates vary, studies 
indicate that as many as 10 million American households do not 
have bank accounts. In addition, many Americans lack the basic 
tools for managing their money and making wise financial 
choices. Many banks and credit unions have partnered with 
community-based non-profit organizations to increase the 
availability of basic banking accounts and financial products 
for low and moderate-income consumers. Among financial 
regulators, the focus has been on facilitating access by 
historically underserved groups to mainstream financial 
services, and on increasing awareness among consumers of the 
benefits of doing business with federally insured, highly-
regulated institutions.
    H.R. 749 promotes outreach to the ``unbanked'' by allowing 
credit unions to offer low-cost financial products and services 
to individuals who are within a credit union's field of 
membership but not yet members. This will also provide credit 
unions an opportunity to establish relationships with 
``unbanked'' members of the community, many of whom are recent 
immigrants, and empower them with the knowledge and tools 
necessary to open a personal account with a mainstream 
financial institution.
    According to the Pew Hispanic Center and Multilateral 
Investment Fund, money transfers by individuals living and 
working in the U.S. back to Latin America, currently estimated 
at $10 billion annually, should more than double--to $25 
billion--by 2010. These so-called ``remittances'' have 
traditionally been executed through money transfer companies 
such as Western Union, but are increasingly being offered by 
depository institutions. Hearings held by the Committee during 
the 108th Congress yielded evidence that over the past four 
years, competition from banks and credit unions offering money 
transfer services has substantially reduced remittance costs 
for consumers. The average cost today of sending $300 to Mexico 
is $13-$14, or 4-5% of the amount sent, compared to the average 
cost four years ago, which was between $30-$32, or 10-11%. H.R. 
749 addresses the explosive growth of the remittance market by 
expanding the ability of credit unions to meet the ever-growing 
demand for these services, which should have the ancillary 
benefit of bringing more consumers into the financial 
mainstream.

                                Hearings

    No hearings were held on this legislation in the 109th 
Congress.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
March 16, 2005, and ordered H.R. 749 reported to the House, as 
amended, by a voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. No 
record votes were taken with in conjunction with the 
consideration of this legislation. A motion by Mr. Oxley to 
report the bill to the House with a favorable recommendation 
was agreed to by a voice vote.
    The Committee considered the following amendment:
          An amendment by Mr. Baca, clarifying international 
        and domestic application, was agreed to by a voice 
        vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee has previously held 
hearings and made findings that are reflected in this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:
    The bill is intended to lower costs paid by consumers for 
check cashing and money transfer services by permitting federal 
credit unions to offer these services. This goal will be 
achieved by enchanced competition in the marketplace.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that this 
legislation would result in no new budget authority, 
entitlement authority, or tax expenditures or revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, April 1, 2005.
Hon. Michael G. Oxley,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 749, the Expanded 
Access to Financial Services Act of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kathleen 
Gramp.
            Sincerely,
                                      Elizabeth M. Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

H.R. 749--Expanded Access to Financial Services Act of 2005

    H.R. 749 would amend current law to allow federal credit 
unions to offer services to nonmembers under certain 
conditions. Nonmembers would have to pay a fee for the services 
and would have to otherwise be eligible for membership in the 
credit union. The types of services authorized would include 
domestic and international money transfers, money orders, check 
cashing, and travelers checks.
    Based on information from the National Credit Union 
Administration (NCUA), CBO estimates that the cost of 
implementing this bill would not be significant. The NCUA 
charges fees to cover its administrative costs, so any 
additional spending would have no net effect on direct 
spending. Enacting this bill would have no effect on revenues.
    H.R. 749 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Kathleen Gramp. 
This estimate was approved by Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional Authority of Congress to enact this legislation 
is provided by Article 1, section 8, clause 1 (relating to the 
general welfare of the United States) and clause 3 (relating to 
the power to regulate interstate commerce).

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section provides the short title of the bill, the 
``Expanded Access to Financial Services Act of 2005''.

Section 2. Check cashing and money transfer services offered within the 
        field of membership

    Section 2 amends Paragraph (12) of section 107 of the 
Federal Credit Union Act (12 U.S.C. 1757(12)) to allow federal 
credit unions to sell negotiable checks, money orders, and 
other similar transfer instruments, including international and 
domestic electronic fund transfers, to anyone eligible for 
membership, regardless of their membership status. Under 
current law, a credit union is only authorized to provide such 
services to those who are already members.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

              SECTION 107 OF THE FEDERAL CREDIT UNION ACT


                                 POWERS

  Sec. 107. A Federal credit union shall have succession in its 
corporate name during its existence and shall have power--
          (1) * * *

           *       *       *       *       *       *       *

          [(12) in accordance with rules and regulations 
        prescribed by the Board, to sell to members negotiable 
        checks (including travelers checks), money orders, and 
        other similar money transfer instruments, and to cash 
        checks and money orders for members, for a fee;]
          (12) in accordance with regulations prescribed by the 
        Board--
                  (A) to sell, to persons in the field of 
                membership, negotiable checks (including 
                travelers checks), money orders, and other 
                similar money transfer instruments (including 
                international and domestic electronic fund 
                transfers); and
                  (B) to cash checks and money orders and 
                receive international and domestic electronic 
                fund transfers for persons in the field of 
                membership for a fee;

           *       *       *       *       *       *       *


                                  
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