U.S. Reps. Janelle Bynum (D-OR) and Young Kim (R-CA) introduced legislation that seeks to provide federal credit unions more flexibility in how they invest their funds.
The bipartisan Credit Union Investment Authorities Act would:
- Amend the Federal Credit Union Act to allow federally chartered credit unions to purchase corporate bonds and invest in asset-backed securities.
- Allow Oregon credit unions to offer their members more affordable interest rates and better loan options.
- Ensure responsible investments by authorizing that no more than 10% of a credit union’s capital may be invested in a single issuer.
- Directs National Credit Union Administration (NCUA) authority to develop rules governing investment decisions and provide key safeguards.
“Hard-working families and business owners need more ways to make their money go further so that they can build a stronger financial future,” Bynum said. “That starts with making sure that people have access to services that allow them to get more from the money they put in their accounts. Giving credit unions better investment options will help expand loan opportunities, make payments more manageable, and put more financial opportunity on the table for Americans.”
Currently, federal credit unions operate under narrow restrictions on where they can invest member deposits. They are largely confined to government securities and a limited range of other investment categories. By having access to a broader range of investment options, this bill will enable credit unions to offer more competitive savings and loan products to their members.
“Credit unions serve over 250,000 people right here in California’s 40th District. Yet outdated federal restrictions limit their ability to invest and deliver the competitive rates their members deserve,” Kim said. “That’s why I am proud to introduce the bipartisan Credit Union Investment Authorities Act to modernize these rules so credit unions can diversify their portfolios and offer more affordable loans. This common-sense reform puts more money back in the pockets of hardworking Californians.”
There are more than 144 million Americans who are members of credit unions.
“To continue operating safely and soundly while offering affordable financial products to their members, federal credit unions need laws that reflect the modern financial services landscape. Antiquated laws currently limit the investment options for credit unions. America’s Credit Unions thanks Representatives Janelle Bynum and Young Kim for recognizing this disparity and introducing the Credit Union Investment Authority Act. Modernizing the Federal Credit Union Act will give credit unions much needed flexibility to diversify their investments, helping them manage their balance sheets, to maintain safety and soundness, and continue providing the most affordable financial services in the country,” Kathleen Coulombe, America’s Credit Unions chief advocacy officer, said.