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NAFCU-supported bill allowing CUs to add underserved areas to FOM introduced in the House
House Financial Services Committee Chair Rep. Maxine Waters, D-Calif., Wednesday introduced NAFCU-supported legislation that would make changes to the Federal Credit Union (FCU) Act to allow all types of federal credit unions to add underserved areas to their field of membership (FOM). The legislation, the Expanding Access for Underserved Communities Act, also exempts member business loans (MBL) made by credit unions in underserved areas from the MBL cap.
In addition, the bill adds "banking deserts," areas not within 10 miles of a branch of a financial institution, to the definition of an underserved area.
"In historically underserved communities, research reflects big banks’ track-record of prioritizing their bottom line over consumers’ well-being while credit unions have, for decades, prioritized critical financial support for those in need," said NAFCU President and CEO Dan Berger. "This is why NAFCU supports Financial Services Committee Chairwoman Maxine Waters’ recently introduced legislation, which will continue to support credit unions and their long-established efforts to eliminate financial disparities in banking deserts and underserved communities across our country.
"We thank Chairwoman Waters and Chairman Ed Perlmutter for their leadership in this effort," concluded Berger.
The draft legislation of the bill was first unveiled by Waters last year following testimony from NAFCU Representative Carlos Pacheco before the House Financial Services Subcommittee on Consumer Protection and Financial Institutions. Speaking on behalf of NAFCU, Pacheco’s testimony highlighted the large need for legislation to allow all types of credit union charters to add underserved areas to their FOM.
NAFCU has long engaged Congress on this topic, with President and CEO of JetStream Federal Credit Union Jeanne Kucey recently testifying on behalf of NAFCU before the Senate Banking Committee to highlight the role of CDFIs and MDIs in their communities and specifically call for changes to the FCU Act that would allow credit unions to serve underserved areas.
Stay tuned to NAFCU Today for the latest on the legislation as it moves through Congress.