Free-Market Think Tank Endorses FOM Legislation

Legislation that would allow all credit unions to add underserved areas to their FOM was endorsed by the Competitiveness Enterprise Institute. Learn why.

David Baumann


May 24



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David Baumann

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David Baumann

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Underserved areas and which credit unions can serve them at the heart of field of membership debate.

The Competitiveness Enterprise Institute (CEI), a free-market think tank, has endorsed legislation that would allow all credit unions to expand their fields of membership to include underserved areas.

The House Financial Services Committee approved such legislation, H.R. 7003, last week.

In a statement posted on the CEI website, Senior Fellow John Berlau noted that when he testified before the House committee in July, he urged members to enact legislation that would liberalize regulations preventing financial institutions, including credit unions and banks, from serving the underbanked.

“I also warned against heavy-handed mandates and schemes for government-run or government-subsidized banking, such as postal banking,” Berlau wrote.

Competitive Enterprise Institute logo

He continued, “In CEI’s view, deregulation of banks, credit unions, or any financial services business is always superior in advancing financial inclusion to more government programs such as public banking and postal banking. HR 7003 is a targeted free-market approach to addressing the problem of the underbanked.”

The stated mission of the CEI is: “to Reform America’s Unaccountable Regulatory State.”

The Larger FOM Battle Between Credit Unions and Banks

Credit union trade groups have been pushing for Congress to pass legislation allowing credit unions to expand their fields of membership to serve underserved areas. Banks on the other hand, have vehemently lobbied against the bill, contending it represents a power grab by credit unions.

The legislation, introduced by Financial Services Committee Chairwoman Rep. Maxine Waters, D-Calif., faces an uncertain future. The bill was approved in committee with no Republican support. And while Democrats might be able to push the bill through the House, Senate passage is far from certain since Democrats control a razor-thin majority in that chamber.

Many bills considered by the Senate require 60 votes in order to guarantee there is no filibuster. If the lack of GOP support in the House is any indication, gaining 60 votes in favor of the bill in the Senate might be impossible.


To learn more about underserved areas and how they can help your credit union expand its FOM, visit our Field of Membership page or contact us directly today!

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