[Pages H3418-H3420]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

CAPITAL ACCESS FOR SMALL COMMUNITY FINANCIAL INSTITUTIONS ACT OF 2014

Mrs. CAPITO. Madam Speaker, I move to suspend the rules and pass the
bill (H.R. 3584) to amend the Federal Home Loan Bank Act to authorize
privately insured credit unions to become members of a Federal home
loan bank, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:

H.R. 3584

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Capital Access for Small
Community Financial Institutions Act of 2014''.

SEC. 2. PRIVATELY INSURED CREDIT UNIONS AUTHORIZED TO BECOME
MEMBERS OF A FEDERAL HOME LOAN BANK.

(a) In General.--Section 4(a) of the Federal Home Loan Bank
Act (12 U.S.C. 1424(a)) is amended by adding at the end the
following new paragraph:
``(5) Certain privately insured credit unions.--
``(A) In general.--Subject to the requirements of
subparagraph (B), a credit union shall be treated as an
insured depository institution for purposes of determining
the eligibility of such credit union for membership in a
Federal home loan bank under paragraphs (1), (2), and (3).
``(B) Certification by appropriate supervisor.--
``(i) In general.--For purposes of this paragraph and
subject to clause (ii), a credit union which lacks Federal
deposit insurance and which has applied for membership in a
Federal home loan bank may be treated as meeting all the
eligibility requirements for Federal deposit insurance only
if the appropriate supervisor of the State in which the
credit union is chartered has determined that the credit
union meets all the eligibility requirements for Federal
deposit insurance as of the date of the application for
membership.
``(ii) Certification deemed valid.--If, in the case of any
credit union to which clause (i) applies, the appropriate
supervisor of the State in which such credit union is
chartered fails to make a determination pursuant to such
clause by the end of the 6-month period beginning on the date
of the application, the credit union shall be deemed to have
met the requirements of clause (i).
``(C) Security interests of federal home loan bank not
avoidable.--Notwithstanding any provision of State law
authorizing a conservator or liquidating agent of a credit
union to repudiate contracts, no such provision shall apply
with respect to--
``(i) any extension of credit from any Federal home loan
bank to any credit union which is a member of any such bank
pursuant to this paragraph; or
``(ii) any security interest in the assets of such credit
union securing any such extension of credit.
``(D) Protection for certain federal home loan bank
advances.--Notwithstanding any State law to the contrary, if
a Bank makes an advance under section 10 to a State-chartered
credit union that is not federally insured--
``(i) the Bank's interest in any collateral securing such
advance has the same priority and is afforded the same
standing and rights that the security interest would have had
if the advance had been made to a federally-insured credit
union; and
``(ii) the Bank has the same right to access such
collateral that the Bank would have had if the advance had
been made to a federally-insured credit union.''.
(b) Copies of Audits of Private Insurers of Certain
Depository Institutions Required To Be Provided to
Supervisory Agencies.--Section 43(a)(2)(A) of the Federal
Deposit Insurance Act (12 U.S.C. 1831t(a)(2)(A)) is amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii), by striking the period at the end and
inserting a semicolon; and
(3) by inserting at the end the following new clause:
``(iii) in the case of depository institutions described in
subsection (e)(2)(A) the deposits of which are insured by the
private insurer which are members of a Federal home loan
bank, to the Federal Housing Finance Agency, not later than 7
days after the audit is completed.''.

SEC. 3. GAO REPORT.

Not later than 18 months after the date of enactment of
this Act, the Comptroller General of the United States shall
conduct a study and submit a report to Congress--
(1) on the adequacy of insurance reserves held by a private
deposit insurer that insures deposits in an entity described
in section 43(e)(2)(A) of the Federal Deposit Insurance Act
(12 U.S.C. 1831t(e)(2)(A)); and
(2) for an entity described in paragraph (1) the deposits
of which are insured by a private deposit insurer,
information on the level of compliance with Federal
regulations relating to the disclosure of a lack of Federal
deposit insurance.

The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
West Virginia (Mrs. Capito) and the gentlewoman from California (Ms.
Waters) each will control 20 minutes.
The Chair recognizes the gentlewoman from West Virginia.
General Leave
Mrs. CAPITO. Madam Speaker, I ask unanimous consent that all Members
have 5 legislative days within which to revise and extend their remarks
and submit extraneous materials for the Record on H.R. 3584, as
amended, currently under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from West Virginia?
There was no objection.
Mrs. CAPITO. Madam Speaker, I yield myself such time as I may
consume.
I would like to thank the gentleman from Ohio (Mr. Stivers) and the
gentlewoman from Ohio (Mrs. Beatty) for their efforts in drafting the
legislation before us this afternoon.
The Capital Access for Small Community Financial Institutions Act is
bipartisan legislation that passed the House Financial Services
Committee by a vote of 55-0 earlier this spring. This bill will provide
meaningful regulatory relief for privately insured credit unions by
allowing them to become members of the Federal Home Loan Bank system.
There are approximately 130 privately insured credit unions, with
nearly $13 billion in assets in nine States across the country. These
credit unions currently cannot join the Federal Home Loan Bank system,
which provides an additional source of mortgage funding for its
members. Allowing privately insured credit unions to join the Federal
Home Loan Bank system will allow these credit unions to increase the
availability of mortgage credit in the communities that they serve.
I commend the office for identifying this inequity and putting forth
this legislation. This issue is not new. Similar provisions were
included in the previous regulatory relief measures that passed the
House with overwhelming support.
I urge my colleagues to support this legislation, and I reserve the
balance of my time.
Ms. WATERS. Madam Speaker, I yield myself such time as I may consume.
I rise to support H.R. 3584, a bill that permits credit unions
insured by private companies access to the Federal Home Loan Bank
system. Today, there are 132 credit unions with approximately $13
billion in assets that cannot access additional liquidity for mortgage
credit but for a statutory obstacle requiring credit unions to have
Federal insurance. With membership, privately insured credit unions
will be able to offer their members mortgages at more affordable rates
and other products, which, in turn, helps many communities across the
country.
In the past, some Members raised concerns that the home loan banks
should only serve federally insured institutions, but I believe that
those concerns have been largely addressed with

[[Page H3419]]

the adoption of several helpful amendments both before and during the
committee markup of this bill.
Mrs. Beatty, for example, worked with Mr. Stivers to address some of
the concerns of the Federal credit union regulator. In addition, the
gentleman from New York (Mr. Meeks) offered two amendments to better
protect the Federal Home Loan Bank system against a bank run among
privately insured credit unions.
All that being said, these credit unions and their private insurer
fared remarkably well during the last financial crisis even as many of
their federally insured counterparts failed. As a result, these credit
unions helped bolster many communities through the economic downturn.
So I would like to thank the sponsors of this bill, Mr. Stivers as
well as his Democratic cosponsor Mrs. Beatty, for all of their efforts
to work across the aisle to assist community financial institutions and
their members.
I support the adoption of H.R. 3584, and I reserve the balance of my
time.
Mrs. CAPITO. Madam Speaker, I would now like to yield such time as he
may consume to the gentleman from Ohio (Mr. Stivers), the author of
this bill.
Mr. STIVERS. Madam Speaker, I would thank the gentlelady from West
Virginia for her support.
I rise in support of H.R. 3584, the Capital Access for Small
Community Financial Institutions Act. This bill simply makes a
statutory change that would allow nonfederally insured credit unions
the right to apply for membership with the Federal home loan banks. It
does not guarantee that they would receive membership. They would have
to go through the membership application like everyone else. Similar
legislation passed the House in 2006, with a bipartisan vote of 415
for, none against.
Purchasing a home is part of the American Dream, and this bill will
help these small credit unions be able to make more mortgage loans as
they use the Federal Home Loan Bank for liquidity and help more people
live the American Dream. This bill would help those credit unions be
able to have the liquidity that they don't have today.
The Federal Home Loan Bank, which was established in 1932, has been
an important part of credit and liquidity for mortgage lending for the
past 80 years for most Main Street institutions. Unfortunately, 132
small credit unions don't have that support right now. While most large
and small institutions who are members of the Federal Home Loan Bank
are able to use it every day for liquidity and to serve their
customers, these 132 small credit unions in nine States with assets
that total about $11 billion are left out because of a glitch in the
law.
There will not be any additional risk to the Federal Home Loan Banks
as a result of this. No more than $4 billion would be pledged,
probably, as a result of this. So there is no real concentration risk.
I do want to thank Mr. Meeks from New York for his amendments that
helped strengthen the bill. And while these credit unions don't have, I
think, much risk to the institution, I think Mr. Meeks' amendments will
ensure that the Federal Home Loan Bank is never put at risk by the
authorizing language in this legislation.

You know, credit unions didn't have Federal insurance until the
1970s, and many small credit unions have continued to have private
insurance and remain State-regulated. Those are the institutions we are
talking about today, and there is precedent for institutions like them
to join the Federal Home Loan Bank. So I believe that it is appropriate
to allow them to not be discriminated against and allow them to use the
Federal Home Loan Bank and ensure that they can serve their customers
the same way other Main Street banks and credit unions can.
Again, this bill does not guarantee that any institution will become
a member of the Federal Home Loan Bank; it simply gives them the
ability to apply.
I want to thank Mrs. Beatty from Columbus, Ohio, and Ranking Member
Waters for their support in the Financial Services Committee. I want to
thank Mrs. Capito and Mr. Meeks for working with me on this bill.
As you heard, this bill passed the Financial Services Committee by a
vote of 55-0. I would ask my colleagues to support this legislation and
correct an oversight that doesn't allow these institutions to use the
Federal Home Loan Bank and doesn't allow many of their customers to
live the American Dream. So hopefully we can correct that today by
supporting this.
Ms. WATERS. Madam Speaker, I yield such time as she may consume to
the gentlelady from Ohio (Mrs. Beatty), the coauthor of H.R. 3584.
Mrs. BEATTY. Madam Speaker, I would like to thank Ranking Member
Waters for all of her support and her leadership.
Madam Speaker, I rise today in strong support of H.R. 3584, the
Capital Access for Small Community Financial Institutions Act, as
amended.
Today I stand here, joining my colleague from Ohio, Congressman Steve
Stivers, in support of final passage of this bipartisan legislation. I
thank the gentleman for introducing this bill on which I partnered as
the lead Democrat. In a show of bipartisanship, we were able to work
together to have the legislation unanimously reported out of the
Financial Services Committee, as it is certainly worth noting again,
with a vote of 55-0.
Madam Speaker, H.R. 3584, if enacted, would permit privately insured
credit unions to apply for membership in the Federal Home Loan Bank
system. It would not, however, mandate that these privately insured
credit unions become members of the Federal Home Loan Bank. Currently,
out of roughly some 6,000 credit unions across the country, there are
132 privately insured credit unions operated in nine States. These
States include Alabama, California, Idaho, Illinois, Indiana, Maryland,
Nevada, my home State of Ohio, and Texas.
In particular, this bill would improve access to home mortgage loans
for members of the three privately insured credit unions that are based
in my Third Congressional District of Ohio. H.R. 3584 is an extremely
important piece of legislation for these privately insured credit
unions because it will help give members and businesses greater access
to credit in a tight credit market.
Additionally, this legislation would also benefit the exclusive
insurers of privately insured credit unions across the country, which
are based in central Ohio, just north of my congressional district,
which provide employment for many Ohioans.

{time} 1645

In addition, Madam Speaker, in order to ensure the best-drafted bill,
Congressman Meeks and I offered amendments that were accepted during
the committee markup.
My amendment does two things. First, it removes any language
referencing the National Credit Union Administration from the text of
the legislation--clarifying that this legislation would not grant any
supervisory jurisdiction to the NCUA over privately insured credit
unions.
Secondly, it created a Government Accountability Office study and
report to Congress on the adequacy of insurance reserves held by the
private insurer of these credit unions and also on the compliance of
these credit unions with Federal regulations requiring consumers to
receive disclosures explaining that such credit unions are privately--
not federally--insured.
These changes were supported by the NCUA and unanimously by the
entire Financial Services Committee.
Indeed, H.R. 3584, the Capital Access for Small Community Financial
Institutions Act, as amended, comes to the floor today because of the
efforts of many members of the Financial Services Committee who worked
to advance the legislation through regular order of the committee.
I would urge support of H.R. 3584 because this bipartisan legislation
is good policy, it is good for small credit unions, and it is an easy
and effective way to demonstrate bipartisan, nationwide support for
local communities and businesses.
Madam Speaker, I believe this legislation is a perfect example of the
type of regular order, committee-driven action that we should use as a
template for bipartisan cooperation in the House, and which, if
enacted, would bring real benefits to the national housing markets. I
urge all of the Members to vote ``yes'' on H.R. 3584, as amended.

[[Page H3420]]

Mrs. CAPITO. Madam Speaker, I have no further speakers. I am prepared
to close, so if the gentlelady would like to close, then I will follow.
Ms. WATERS. Madam Speaker, I simply ask for support for this
important legislation, and I commend both Mr. Stivers and Mrs. Beatty
for the wonderful job that they did in providing the kind of leadership
that brought both sides of the aisle together. I would simply ask for
support, and I yield back the balance of my time.
Mrs. CAPITO. I want to thank both the sponsors, as well, and the
committee chair and Ms. Waters for her work on this bill. I echo her
sentiments. I would like to urge support and yield back the balance of
my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from West Virginia (Mrs. Capito) that the House suspend the
rules and pass the bill, H.R. 3584, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. GOHMERT. Madam Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.

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