Credit Union Field of Membership Bill Advances in House Committee

Maxine Waters, Chairwoman of the House Financial Services Committee (D-CA)
Maxine Waters, Chairwoman of the House Financial Services Committee (D-CA)

On Wednesday, the House Financial Services Committee advanced H.R. 7003, which would allow federally chartered credit unions to serve so-called "banking deserts." Committee Chairwoman Maxine Waters (D-CA) is author of the bill.

The bill's movement (Expanding Financial Access for Underserved Communities Act) is big news for credit unions. It's been 17 years since the industry had a specific credit union bill move forward out of a congressional committee.

The bill also allows credit unions unlimited business lending authority in these low income, underserved and rural communities. Wednesday's debate was brief, with only a handful of committee members in the room on Capitol Hill in Washington, D.C.

Waters defended her bill (also the position of the California and Nevada Credit Union Leagues) and noted the difference in types of federally chartered credit unions. She also noted that some credit unions are already serving low income communities. She used her relationship with Kinecta FCU and SchoolsFirst FCU to show the difference in charter type.

The only objection came from Rep. Andy Barr (R-KY), who spoke mostly about a level playing field for lenders as an incentive to lend in these communities. Barr has similar legislation for newly-chartered banks. However, Waters bluntly concluded: "If banks wanted to serve these communities, they would be there. Banks don’t want this market; credit unions do."

The Leagues and the Credit Union National Association (CUNA) have worked extensively with Waters to bring this bill about. For an industry to have a bill offered by the committee chairwoman and advocated so strongly by her is a pinnacle moment in collaboration of several partners, including League-member credit unions and credit union executives who devote their time to advocacy.

"This is a system win, with much work ahead," said Jeremy Empol, vice president of federal government affairs for the Leagues.

The final vote on the bill was 27-to-22 to advance the bill to the House Floor.

Additionally, the committee advanced H.R. 7022 to give the National Credit Union Administration (NCUA) and related industries oversight of third-party vendors. The Leagues and CUNA are engaged on this issue and will be working to oppose it.

The full committee debate can be viewed here.

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