Allow CUs to Expand FOMs to Underserved Areas: NAFCU Witness to House Panel
Also at the House Subcommittee hearing, Rep. Luetkemeyer says the CECL standard will “hit minority institutions hard.”
Credit unions are limited by federal law in their efforts to serve the underserved, Mara Falero, vice president of JetStream Federal Credit Union told a House Subcommittee Tuesday.
“Many credit unions want to help those in underserved areas but the ability to add underserved areas to their field of membership is restricted,” said Falero, whose credit union is headquartered in Miami Lakes, Fla., and has $212.9 million in assets. “Currently, only multiple-common-bond credit unions have the authority to add underserved areas.”
Testifying before the House Financial Service’s Consumer Protection and Financial Institutions, she asked House members to pass legislation to allow all credit unions to add underserved areas to their fields of membership.
The subcommittee held a hearing on the decline of minority institutions; Falero was testifying on behalf of NAFCU.
As the subcommittee began the hearing, Chairman Gregory Meeks (D-N.Y.) highlighted details of his proposal to provide support for minority institutions. He said his plan would push funding for the Community Development Financial Institutions fund and create Minority Depository Institutions Advisory Committees at each banking regulator.
Subcommittee Chairman Blaine Luetkemeyer (R-Mo.) blasted Financial Services Chairman Maxine Waters (D-Calif.) for failing to consider legislation that would delay the Current Expected Credit Loss standard.
He said the standard, which will require financial institutions to recognize the expected lifetime losses at the time a loan or financial instrument is recorded, will hit minority institutions hard.
In her written testimony, Falero also urged Congress to:
- Adopt more flexible provisions in federal law governing prompt corrective action requirements for de novo credit unions.
- Support NCUA efforts to permit credit unions to issue subordinated debt.
- Provide a more streamlined approach for the approval of secondary capital applications. She said particular guidance on how credit unions may better project future performance would be extremely helpful.
She said NAFCU also supports allowing supplemental capital for well-run, well-capitalized credit unions, a project she said the NCUA is working on. And, she added the trade association supports giving the NCUA power to extend the 15-year limit on federal credit union loans.