"It will be hard to get the legislation passed," Stverak said. But he said there were also steep odds against the House bill, and still it prevailed with the support of CUNA, NAFCU and regional credit union leagues.

Sen. Alex Padilla (D-Calif.), introduced the Expanding Financial Access for Underserved Communities Act.

CUNA President/CEO Jim Nussle said the bill represents the most significant modernization of the Federal Credit Union Act since 1998.

Jim Nussle

"We thank Sen. Padilla for his leadership in helping credit unions bring safe and affordable financial services to under- and unbanked communities," Nussle said. "The House has already passed this bill, and we look to continue to gather support in the Senate for this much-needed update to credit unions' fields of membership."

Greg Mesack, NAFCU's SVP of government affairs, also applauded Padilla for introducing the companion bill.

Greg Mesack

"This bill is imperative in helping all types of federal credit unions better serve local communities by adding underserved areas to their field of membership, communities that are often left behind by megabanks," Mesack said. "We will continue to engage with lawmakers to help credit unions better uplift disadvantaged communities."

The bill is expected to be assigned to the Senate Banking Committee, chaired by Sherrod Brown (D-Ohio).

The legislation would:

• Allow all federal credit unions to add underserved areas to their field of membership;
• Exempt business loans made in underserved areas from the member business lending cap; and
• Expand the definition of an underserved area to include any area that is more than 10 miles from the nearest financial institution branch.

Diana Dykstra, president/CEO of the California Credit Union League, said the bill's introduction to the Senate shows "the California congressional delegation continues to speak with their actions to show their depth of support for credit unions."

Diana Dykstra

Dykstra continued, "Allowing credit unions to serve banking deserts is vital for our state of over 40 million consumers. I would like to thank Senator Padilla for joining Chairwoman Waters as the leaders of this effort."

More than 750 census tracts are financial deserts — having no bank or credit union branch within 10 miles. While banks closed a net of about 7,800 branches from January 2005 through March 2021, credit unions opened more than 1,400 net branches over the same period, according to CUNA research.

Stverak said the bill would "allow credit unions to serve more of the underbanked and unbanked across the country."

Banks have opposed the bill, in part on the grounds it expands credit union fields of membership beyond common bonds.

However, Stverak noted the full House amended the final bill to say that nothing in the bill precludes banks from serving these under- and unserved communities.

"We would encourage them to join us as we go into these communities to serve these individuals," he said.