U.S. Reps. Vicente Gonzalez (D-TX) and Brian Fitzpatrick (R-PA) introduced legislation aimed at creating more opportunities for Americans to own their own home.
The legislation, Minimizing Outdated Restrictions that Exclude (MORE) Opportunities for Homeownership Act, would amend the Federal Home Loan Bank Act to increase the ability for federally insured credit unions to improve access programs under the Federal Home Loan Bank (FHLB) System such as low-cost liquidity, collateralized advances, and affordable housing and community investment programs. The program modernization is designed to strengthen community-based lenders, the law makers said, and expand responsible mortgage lending capacity as a way to help more families achieve homeownership.
“For generations, owning a home has been largely considered part of the American dream. Yet, this dream continues to be out of reach for too many South Texas families,” Gonzalez said. “Our bill offers another path to homeownership by providing credit unions the same flexibilities as small banks and saving institutions to provide loans. This will increase affordable access to homeownership for every family.”
Currently, federal legislation defines a “community financial institution” (CFI) as a Federal Deposit Insurance Corporation(FDIC)-insured depository institution with average total assets below the statutory cap, that is adjusted annually by the Federal Housing Finance Agency, a definition which includes small banks and savings institutions. Federally insured credit unions can join the FHLB System, but because their deposits are insured under the Federal Credit Union Act and not the FDIC Act, they are not treated as CFIs.
“The housing affordability crisis is a daily reality for families who are working hard, saving responsibly, and still watching the dream of owning a home slip further away,” Fitzpatrick said. “Part of that challenge is structural. Outdated policies restrict access to capital and limit the lending capacity of trusted community institutions… When we expand access to capital, we expand access to opportunity. This bipartisan reform helps to restore balance to our housing market and bring the American Dream of homeownership back within reach.
The legislation is supported by credit union and advocacy organizations, including America’s Credit Unions and CrossState Credit Union Association.
“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,” Scott Simpson, president/CEO of America’s Credit Unions, said. “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