Removing Barriers Blog

S. 1367, Access to the FHLB System for Privately Insured Credit Unions
Posted June 03, 2015 by CUNA Advocacy

Senator Donnelly (D-IN) and Senator Portman (R-OH) introduced S. 1367 today, which would amend the Federal Home Loan Bank (FHLB) Act to provide equity for privately insured credit unions. The House has already passed its own version of the bill H.R 299, the Capital Access for Community Financial Institutions Act this Congress. CUNA sent a letter in support of the bill to Senator Donnelly and Senator Portman.

When the FHLB system was opened up for the first time to commercial banks and credit unions, the bill was drafted so that it applied only to “insured credit unions” defined by the Federal Credit Union Act. It was merely an oversight, but an oversight that has prohibited state charted, privately insured credit unions from joining the FHLB system. Currently there are 119 non-federally insured insurance companies that are members of the system, borrowing almost twice as much as the 427 federally insured credit unions. Adding these additional credit unions will pose no additional risk to the system. CUNA will continue to advocate on this bill, so that privately insured credit unions are granted access to the liquidity of the FHLB system.