The House Financial Services Committee on Wednesday approved legislation which would require federal financial regulators to develop a strategic plan to encourage the chartering of new credit unions and banks. The panel approved H.R 4590 by voice vote. The bill, sponsored by Rep. Jake Auchincloss, D-Mass., would require the regulators to conduct an 18-month study examining the challenges that newly chartered credit unions and banks face. Following that study, the regulators would be required to develop a strategic plan to promote creation of new financial institutions, particularly minority depository institutions and community development financial institutions. In a memo prepared for
The House Appropriations Committee on Tuesday approved an FY22 Financial Services spending bill that would provide large increases for community development financial institutions programs and would establish a pilot program to test postal banking.
The Biden Administration announced Tuesday it has awarded 244 Community Development credit unions a total of $401.8 million to help the institutions and the communities they serve recover from the economic problems caused by the coronavirus crisis.
President Biden proposed Friday to increase the National Credit Union Administration’s Community Development Revolving Loan Fund program by $500,000 in FY22.
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.
House Financial Services Dems Push for $8.5 Million Boost for Credit Union Community Development Fund
Democrats on the House Financial Services Committee are asking congressional budget writers for an $8.5 million increase for the National Credit Union Administration’s Community Development Revolving Loan Fund in FY22.
That represents an increase of almost 567% over the $1.5 million the program received during the current fiscal year. The Democrats said that 40% of the CDRLF funds should be set aside for Minority Depository Institutions.
Low-income credit unions will be able to submit grant applications for the National Credit Union Administration’s Community Development Revolving Loan Fund between May 3 and June 26, the agency announced last week.
Credit union trade groups report that the Small Business Administration and the Treasury Department are still failing to anticipate problems with the Paycheck Protection Program rollout and are still playing catch-up with issues. Nevertheless, the trade groups also report that this rollout has gone a lot smoother than in the past.
The National Credit Union Administration will begin accepting applications on Jan. 24 for federally insured, low-income credit unions that want to use the agency’s streamlined qualification process to be certified as Community Development Financial Institutions.
The new Paycheck Protection Program starts with initial lending limited to businesses who have not received a PPP loan and lending going through Community Development Financial Institutions, Minority Depository Institutions, certified development corporations and microlenders. After a few days the lending options open further.