Wednesday, December 4, 2013

Bill Would Grant Privately-Insured CUs Access to Federal Home Loan Banks

Rep. Steve Stivers (R – OH) introduced a bill (H.R. 3584) to amend the Federal Home Loan Bank Act authorizing privately insured credit unions to become members of a Federal Home Loan Bank; but only if the privately insured credit union meets all the eligibility requirements for federal deposit insurance.

However, the bill seems to be more directly targeted at American Mutual Share Insurance (ASI) of Dublin, Ohio, which is the only primary insurer of non-federally insured credit unions.

The number of privately insured credit unions has dropped by one-third over the last decade, from 212 institutions to 137 credit unions as of June 2013. Most of these credit unions are located in five states.

In this case, this trend is not the friend of ASI.

By granting privately-insured credit unions access to the Federal Home Loan Bank system, the bill hopes to make private insurance more attractive for state chartered credit unions that are currently federally insured. This would provide ASI with an opportunity to maintain a critical mass of credit unions to remain viable.

Read the bill.

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