Bill Expanding FOM Rules Passes House Committee

CUNA- and NAFCU-supported bills that passed the House Financial Services Committee on Wednesday would expand field of membership for all federal credit unions to add underserved areas and would create a permanent fix for CDFI funding.

The two pieces of legislation, the Expanding Financial Access for Underserved Communities Act and the CDFI Bond Guarantee Program Improvement Act, will now advance to the full House of Representatives for consideration.

According to details of the Expanding Financial Access for Underserved Communities Act (H.R. 7003), the bill would allow all federal credit unions to include underserved areas to their field of membership – adding areas not within 10 miles of a branch to the definition of an underserved area.

“Today, lawmakers chose to put credit unions and the consumers they serve first. Advancing the NAFCU-backed Expanding Financial Access for Underserved Communities Act is a step forward in helping the credit union industry expand support to underserved communities, especially those hit hardest because of big banks’ declining presence in these areas,” NAFCU President/CEO Dan Berger said.

“Thank you to all on the committee who supported this important legislation and credit unions’ efforts to promote financial well-being for all,” CUNA President/CEO Jim Nussle said. “This legislation provides a commonsense market-based solution to reach the nearly one in five households that are un- or underbanked across the country.”

According to a statement from CUNA, the bill would also allow business loans for underserved areas to be exempt from the credit union member business lending cap.

NCUA Chairman Todd Harper said of the Committee’s passage of H.R. 7003, “These changes are essential to increasing access to safe, fair and affordable financial services in rural communities, communities of color and other underserved places. They would also advance financial inclusion within our nation’s financial system.”

In addition to the FOM expansion bill, the Committee passed the CDFI Bond Guarantee Program Improvement Act, which would provide long-term capital to CDFIs. Since 2014, the CDFI program has been extended on a year-to-year basis. This legislation would give the CDFI program access to permanent funding.

Berger said, “Moving the CDFI Bond Guarantee Program Improvement Act closer to law will allow the program to continue its important work of helping fund the economic development activities in underserved communities. NAFCU is proud of our member credit unions for championing these issues and we will continue to work with Congress as these bills progress.”