House Panel Hints at Field of Membership Expansion Legislation

The House Financial Services Committee has given an early indication that it may consider legislation that would allow credit unions to expand their fields of membership into underserved areas.

The legislation has not been introduced yet, but it is listed among the draft bills that the committee may discuss at a Wednesday hearing that features financial regulators, including National Credit Union Administration Chairman Todd Harper. The legislation has long been sought by credit union trade groups.

The bill would allow credit unions to expand their fields of membership to include underserved communities that lack a depository institution within ten miles.

“We’re pleased to see that it’s part of this hearing,” Credit Union National Association Chief Advocacy Officer Ryan Donovan told reporters during the trade group’s weekly press call.

The bill is included on a memo that committee Democratic staff is circulating in advance of the hearing. There are nine bills listed in the memo as possible discussion topics, although they have not been introduced in this Congress.

The Financial Services Committee also may discuss legislation that would:

  • Permanently extend temporary changes to the NCUA Central Liquidity Facility that were made in response to the coronavirus crisis. Credit union trade groups have endorsed such legislation.
  • Require financial regulators, including the NCUA and Consumer Financial Protection Bureau, to study the challenges facing groups that want to start a financial institution, particularly Community Development Financial Institutions and Minority Depository Institutions.
  • Provide the NCUA with the power to oversee third-party vendors. The agency’s Inspector General, as well as members of the agency board, have endorsed that legislation. Donovan said that CUNA understands the need for some oversight power in critical situations but opposes giving the NCUA wide power to supervise vendors. He said CUNA will try to work with committee staff to develop a more targeted approach.
  • Kill a rule issued by the Office of the Comptroller of the Currency that would allow lenders to partner with banks to make loans to consumers. Credit union trade groups and consumer advocates have said that the rule essentially allows predatory lenders to “rent” a bank in an effort to make predatory loans that otherwise would be prohibited. The Senate already has passed that resolution.

Related:

Memo to the House Committee on Financial Services from the Majority Staff Regarding the Hearing Scheduled for May 19, 2021

Senate Passes Resolution to Kill OCC ‘Rent-a-Bank’ Rule

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