WASHINGTON--Credit unions fully support legislation introduced Tuesday by Reps. Vicente Gonzalez (D-TX) and Brian Fitzpatrick (R-PA) that would allow more credit unions to join the Federal Home Loan Bank system, America's Credit Unions said.
The Defense Credit Union Council echoed that view.
FHLBank members have access to reliable, low-cost liquidity, as well as financial and community services and products. Currently, FHLB member financial institutions must hold 10% of their assets in residential mortgage loans, but Community Financial Institutions (CFIs) are exempt from this requirement.
The bill would specifically include credit unions in the CFI definition, expanding eligibility for FHLBank membership for more than 1,800 credit unions to join their regional FHLBank, ACU explained.
“America’s Credit Unions welcomes bipartisan legislation from Congressmen Vicente Gonzalez and Brian Fitzpatrick that would enhance credit unions’ ability to access the Federal Home Loan Bank system,” said America’s Credit Unions President/CEO Scott Simpson. “This bill is a common-sense solution that affirms what Congress has known for years, and that the Government Accountability Office recently confirmed: access to the FHLB system for small financial institutions improves their access to liquidity, lowering rates for consumers while maintaining their safety and soundness. Ultimately, expanding access to the FHLBs would benefit thousands of community-based credit unions and give them a powerful, safe tool to support homeownership, strengthen local communities, and help more people build financial security.”
“We appreciate the leadership of Reps. Vicente Gonzalez and Brian Fitzpatrick in recognizing that credit unions are vital community financial institutions,” said Jim Phelps, executive vice president and chief advocacy officer, Cornerstone League. "Access to the Federal Home Loan Bank system strengthens our ability to provide mortgages, manage liquidity, and serve members in good times and bad.”
"We commend Representatives Fitzpatrick and Gonzalez for sponsoring this important legislation as a step toward ensuring credit unions have fair access to the Federal Home Loan Bank system,” said Patrick Conway, president/CEO CrossState Credit Union Association. "When credit unions can fully participate in the FHLB, they are better positioned to expand mortgage lending, support local housing markets, and deliver long-term stability for the members and communities who rely on them. Expanding access strengthens not just credit unions, but the communities they serve.”
DCUC Responds
The Defense Credit Union Council shared its support for the legislation.
“This is a practical, solutions-oriented step that recognizes the important role credit unions play in providing liquidity, stability, and affordable mortgage lending in communities across the country — including those serving our nation’s servicemembers, veterans, and their families," stated DCUC Chief Advocacy Officer Jason Stverak. "For defense credit unions in particular, access to reliable liquidity sources is not theoretical — it is mission critical. Our member institutions often operate on or near military installations and serve communities that can experience sudden deployment cycles, government shutdown disruptions, natural disasters, and economic volatility. Ensuring these credit unions have equitable access to the FHLB system strengthens their ability to meet member needs during both calm and crisis."
Stverak pointed out the legislation modernizes eligibility standards in a way that reflects today’s financial services landscape.
"Credit unions are already heavily regulated, safety-and-soundness focused institutions. Expanding their ability to participate more fully in the FHLB system enhances systemic stability, supports mortgage availability, and reinforces local housing markets without adding risk to taxpayers," he said. "At its core, this is about parity and preparedness. When credit unions have access to diversified liquidity channels, they are better positioned to keep mortgage lending flowing, offer competitive rates, and serve families who rely on them — including military families who move frequently and depend on stable financial partnerships. We commend Representatives Gonzalez and Fitzpatrick for recognizing this need and advancing a bipartisan solution. DCUC looks forward to working with Congress to move this legislation forward and ensure credit unions have the tools necessary to continue serving those who serve our country."