House advances legislation to boost housing market

The House of Representatives approved legislation on Wednesday that was introduced by Rep. Steve Stivers (R-Ohio) to boost the housing market by providing regulatory relief to community-based enterprises.

Stivers introduced the bipartisan Capital Access for Small Community Financial Institutions Act with Rep. Joyce Beatty (D-Ohio). The measure would allow privately insured credit unions to apply for membership in the Federal Home Loan Bank (FHLB) system.

“Purchasing a home is an important part of the American dream,” Stivers, a member of the House Financial Services Committee, said. “With the continued stagnation in the housing market, I believe it is important to ensure our community-based lending institutions offer new mortgages, and this bill does that by allowing more institutions to have access to the home loan bank system. It will help many people live their American dream of buying a home.”

The FHLB system has provided credit and liquidity for mortgage lending – particularly to main street institutions – since 1932. Some privately insured credit unions that represent firefighters, teachers, churches and small businesses, however, have been blocked from applying to the FHLB system for more than two decades due to legislative oversight.

Stivers’ bill would allow privately insured credit unions to apply for membership in the FHLB system.

Under the bill, private deposit insurers of credit unions would submit audit reports to the National Credit Union Administration. If the credit union was an FHLB member, it would also submit reports to the Federal Housing Finance Agency.

Upon request, a state’s supervising agency would then be required to provide the National Credit Union Administration with any information it has about private deposit insurers of credit unions that are FHLB members without federal deposit insurance.