As the House Financial Services Committee prepares for a markup of legislation next week, the National Association of Federally-Insured Credit Unions is asking the panel to consider legislation that would allow credit unions to expand their services to underserved areas.
“Many credit unions want to do more to help underserved areas as banks retreat from these areas and passing legislation to help credit unions fill the void would be a commonsense first step,” NAFCU Vice President of Legislative Affairs Brad Thaler wrote to committee leaders last week.
The Financial Services Committee has not released a list of bills it will consider during the Sept. 13 markup.
At a July 16 hearing, the committee discussed, among other measures, draft legislation that would allow credit unions to expand their services to underserved areas, including communities that do not have a depository institution within ten miles. The draft bill also would exempt loans made by credit unions to businesses in those areas from the credit union member business lending cap.
“An MBL cap serves as a disincentive for many credit unions to focus on small business programs, as successful small business efforts could reach the cap and run into limitations,” Thaler wrote.
Banking trade groups contend that legislation is a power grab by the credit union industry to expand fields of membership.
But Thaler noted that in 2019, the Federal Reserve published a study that showed that between 2012 and 2019, 7% of rural bank branches were lost. Credit unions, Thaler said, added branches in rural and urban areas.