Amid Republican opposition, the House Financial Services Committee on Wednesday approved legislation that would make pandemic-related changes to the National Credit Union Administration’s Central Liquidity Facility permanent.
House Financial Services Chairwoman Maxine Waters, D-Calif., said that the pandemic demonstrated the need to have “safeguards and backstops” in the financial system. Panel Republicans questioned the need for the legislation, saying that during the pandemic, no credit unions have relied on the CLF.
The committee approved the bill, H.R. 3958, in a 28-22 vote. No Democrat voted against the bill and no Republican voted for it.
The legislation would make permanent pandemic-related provisions that increased the CLF’s borrowing authority from 12 times its total capital to 16 times its total capital. The provisions currently are set to expire at the end of the year. The bill also asks the Government Accountability Office to study the impact of the changes.
Committee ranking Republican Patrick McHenry of North Carolina said that Congress agreed in economic stimulus legislation to allow the CLF temporary authority to ensure the health of the nation’s credit unions. He said he was willing to extend that authority for another year as long as the Government Accountability Office studied the CLF’s effectiveness. But referring to Waters’ legislation, McHenry said, “There is no data to justify this.”
Waters noted that credit union trade groups, NCUA Chairman Todd Harper and former board Chairman Rodney Hood have called on the House and Senate to enact the changes, contending that they are needed, as credit unions recover from the economic crisis caused by the pandemic.
The committee also approved municipal identification card legislation sponsored by Rep. Ritchie Torres, D-N.Y. Torres said that many cities, including New York City, have adopted a system of issuing identification cards for people who may not have a driver’s license.
He said, however, there is no guidance stating that financial institutions should accept the cards as valid identification for opening bank accounts, and so many financial institutions do not accept them. He said the legislation simply directs financial regulators to issue guidance stating that the municipal identification cards should be accepted in banks and credit unions.
Torres said that many people who do not have bank accounts must rely on alternative financial services, such as check-cashing services that charge large fees. “Lack of banking access leaves people vulnerable to exploitation,” he said.
Rep. Warren Davidson, R-Ohio, said he is concerned that municipal identification systems are vulnerable to people in the U.S. illegally.
The committee approved the bill on a 27-23 vote, with no Democrat voting against it and no Republican voting for it. Both bills now go to the House floor.