CU-backed FOM modernization bill advances

The U.S. House Financial Services Committee on Wednesday advanced the Expanding Financial Access for Underserved Communities Act (H.R 7003) with a 27-22 vote. The bill represents the most significant proposed update to the Federal Credit Union Act since 1998.

Earlier this week, the New York Credit Union Association joined with CUNA and other Leagues around the country in signing a letter in support of the bill, which was introduced in March by U.S. Rep. Maxine Waters (D-CA), chair of the House Financial Services Committee.

H.R. 7003 would:

  • allow all federal credit unions to add underserved areas to their field of membership;
  • exempt business loans made by credit unions in underserved areas from the credit union member business lending cap; and
  • expand the definition of an underserved area to include new markets tax credit areas and any area that is more than ten miles from the nearest financial institution branch.

More than 750 census tracts are financial deserts, and a net 7,800+ bank branches closed between January 2005 and March 2021, according to CUNA research. Meanwhile, credit unions opened more than 1,400 net credit union branches over the same time period, according to CUNA.

The Financial Services Committee also on Wednesday approved H.R. 7022, the Strengthening Cybersecurity for the Financial Sector Act of 2022, which would give the NCUA oversight powers to police third-party vendors hired by credit unions, and the CDFI Bond Guarantee Program Improvement Act, H.R. 7733, which would provide long-term capital to CDFIs.  

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