FOM modernization bill introduced in Senate

Sen. Alex Padilla, D-Calif., introduced the CUNA and league-led Expanding Financial Access for Underserved Communities Act. The bill, which represents the most significant modernization of the Federal Credit Union Act since 1998, passed the House in June as part of a larger legislative package.

“We thank Sen. Padilla for his leadership in helping credit unions bring safe and affordable financial services to under- and unbanked communities,” said CUNA President/CEO Jim Nussle. “The House has already passed this bill, and we look to continue to gather support in the Senate for this much-needed update to credit union fields of membership.”

The legislation would:

• Allow all federal credit unions to add underserved areas to their field of membership.
• Exempt business loans made in underserved areas from the member business lending cap.
• Expand the definition of an underserved area to include any area that is more than 10 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. Credit unions opened more than 1,400 net credit union branches over the same period.

Read the article in detail here.