CAPITAL ACCESS FOR SMALL COMMUNITY FINANCIAL INSTITUTIONS ACT OF 2015; Congressional Record Vol. 161, No. 52
(House of Representatives - April 13, 2015)

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[Pages H2119-H2120]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 CAPITAL ACCESS FOR SMALL COMMUNITY FINANCIAL INSTITUTIONS ACT OF 2015

  Mr. NEUGEBAUER. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 299) 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.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                H.R. 299

       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 2015''.

     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 ``; and''; 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 gentleman from 
Texas (Mr. Neugebauer) and the gentleman from Massachusetts (Mr. 
Capuano) each will control 20 minutes.
  The Chair recognizes the gentleman from Texas.

[[Page H2120]]

                             General Leave

  Mr. NEUGEBAUER. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days in which to revise and extend their remarks and 
to add extraneous material on this bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. NEUGEBAUER. Mr. Speaker, I yield 5 minutes to the gentleman from 
Ohio (Mr. Stivers), the sponsor of this bill.
  Mr. STIVERS. I would like to thank the gentleman from Texas for 
yielding me time.
  Mr. Speaker, I rise in support of H.R. 299, the Capital Access for 
Small Community Financial Institutions Act.
  I would like to thank Chairman Hensarling and the other bill 
sponsors--Mrs. Beatty from Ohio, Mr. Tiberi from Ohio, and Mr. Carson 
from Indiana.
  As you can hear, I lost my voice last night, but I am the voice for 
1.2 million people who are currently denied access to the liquidity 
that the Federal Home Loan Bank system offers inside financial 
transactions.
  This bill would simply make a small statutory change that would allow 
nonfederally insured credit unions to apply for membership in the 
Federal Home Loan Bank system. It would not guarantee their 
memberships. They would go through the normal underwriting process like 
any other applicant. The irony here is that every other credit union 
can join the Federal Home Loan Bank system, and every other bank and 
many nonbank entities, like insurance companies, are allowed to join 
the Federal Home Loan Bank system. Only privately insured credit unions 
are denied.
  Currently, there are 128 small credit unions in nine States 
representing 1.2 million people, including firefighters and teachers 
and church workers and small business people, with total assets of $13 
billion, people who are not insured by the Federal Government but who 
are insured by a mutual private insurance company and so are denied 
access to the Federal Home Loan Bank system. This bill would simply 
change that and fix it.
  Some important points are: one, there is no risk to the Federal Home 
Loan Bank system. Two, no more than $4 billion of that $13 billion 
could be pledged to the Federal Home Loan Bank system at any one time, 
and that is if all 128 credit unions joined the Federal Home Loan Bank 
system. Three, there is no concentration risk. There is no 
disproportionate risk with these institutions.
  I think it is really important that we give these 1.2 million people 
the access to the liquidity that the Federal Home Loan Bank system 
would offer them.
  I would ask my colleagues to support this legislation, which would 
give community financial institutions the ability to apply for 
membership in the Federal Home Loan Bank system and which would provide 
important liquidity to these 1.2 million people who might want to buy a 
home or live the American Dream.
  Again, I want to thank my cosponsor, who helped so hard to get this 
bill done, Congresswoman Joyce Beatty from Ohio; and I want to thank 
Chairman Neugebauer, Chairman Hensarling, and the other cosponsors of 
the bill.
  Mr. CAPUANO. Mr. Speaker, I yield such time as she may consume to the 
gentlewoman from Ohio (Mrs. Beatty), who is the cosponsor of this bill.
  Mrs. BEATTY. Thank you, Mr. Capuano, for yielding me time.
  Thank you, Mr. Neugebauer and Mr. Stivers.
  Mr. Speaker, I rise today in strong support of the Capital Access for 
Small Community Financial Institutions Act of 2015, H.R. 299.
  I join Congressman Steve Stivers in support of H.R. 299. My 
colleagues on both sides of the aisle supported this bill in a 
bipartisan fashion, a bill on which I am very proud to be the lead 
Democrat. We have worked together to have H.R. 299 reported out of the 
House Financial Services Committee with a vote of 56-1. In fact, last 
year, the same bill passed unanimously on this House floor by 395-0.
  Mr. Speaker, as you have heard, H.R. 299 would permit privately 
insured credit unions to apply for membership in the Federal Home Loan 
Bank system. A primary benefit of the Federal Home Loan Bank membership 
is having access to low-cost secured funding, which is a tremendous 
benefit to consumers. H.R. 299 would not, however, mandate the 
privately insured credit unions to become members of a Federal Home 
Loan Bank. Therefore, under this legislation, a Federal Home Loan Bank 
would maintain the discretion to accept or to reject a privately 
insured credit union's application for membership based on its risk 
tolerance and underwriting guidelines.
  Why do we need this bill?
  H.R. 299 is an extremely important piece of legislation for these 
privately insured credit unions because it would help give members and 
businesses greater access to credit in a tight credit market. 
Currently, there are approximately 6,400 credit unions across the 
country, including some 128 to 130 privately insured credit unions. Of 
that number of those privately insured credit unions, Mr. Speaker, 57 
of them are actually in Ohio. Both I and Mr. Stivers, the sponsor of 
the bill, are from the great State of Ohio. These 57 privately insured 
credit unions in Ohio serve more than 333,000 members in Ohio, and, 
roughly, 145,000 of those members are actually in my district.
  Indeed, the Capital Access for Small Community Financial Institutions 
Act of 2015, or H.R. 299, comes to the floor today because of the very 
important role we believe that credit unions play in consumer lending 
and homeownership across this country.
  For instance, this bill would improve access to home mortgage loans 
for members of three privately insured credit unions that are actually 
based in my district, the Third Congressional District of Ohio. Those 
are the Whitehall Credit Union, Producers Employee Credit Union, and 
the Central Credit Union. Additionally, this legislation has garnered 
support from the exclusive insurers of privately insured credit unions 
across the country--American Share Insurance, or ASI. ASI, which is 
based in central Ohio, which is just north of my district, continues to 
provide employment for many Ohioans, and it has never previously had a 
privately insured credit union depositor lose money.
  Therefore, I urge the support of H.R. 299 because this bipartisan 
legislation is good policy, is good for small credit unions, and may 
spur the growth of small credit unions, which serve the needs of their 
members, both individuals and businesses. Importantly, H.R. 299 has 
bipartisan, nationwide support for local communities and businesses.
  Mr. Speaker, I believe this legislation is a perfect example of the 
type of regular order, committee-driven actions that we should use, 
actually, as a template for bipartisan cooperation in the House and 
which, indeed, if enacted, would bring real benefits to the national 
housing market. I urge Members to vote ``yes'' on H.R. 299.
  Mr. NEUGEBAUER. Mr. Speaker, I have no other speakers at this time, 
and I reserve the balance of my time.
  Mr. CAPUANO. Mr. Speaker, we have no further speakers. I would just 
like to add my voice in support of this bill. It is a very commonsense 
bill, and I am proud to be able to support it.
  I yield back the balance of my time.
  Mr. NEUGEBAUER. Mr. Speaker, I just want to echo the remarks that 
have been made.
  This is a commonsense bill. It helps Main Street, and it helps 
consumers. There was a little glitch here in the marketplace when these 
privately insured credit unions were not able to access the Federal 
Home Loan Banks. It just makes sense that they do that. This bill 
passed out of our committee 56-1. With that, I urge my colleagues to 
pass this bill.
  I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Byrne). The question is on the motion 
offered by the gentleman from Texas (Mr. Neugebauer) that the House 
suspend the rules and pass the bill, H.R. 299.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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