House Passes Bill that Would Increase FOM Options
House passes bill that would increase FOM options, however Senate passage remains uncertain. Learn why.
Senate passage remains uncertain.
The House on Wednesday passed legislation that would, among other things, allow all federal credit unions to expand their fields of membership to serve underserved areas.
Voting 215-207, the House passed H.R. 2543—legislation that attempts to address what Democrats have identified as long-standing inequities in the financial services industry. The credit union provision is one section of the larger bill.
The bill would expand the ability of all federal credit unions to serve underserved areas, that is, census tracts in which 85% of the area qualifies as low-income or areas that are more than ten miles from the nearest branch of a depository institution. The bill also would exempt business lending in those areas from the credit union member business lending cap.
Passage of the measure followed defeat of an amendment by House Republicans to kill several sections of the bill, including the FOM expansion section.
That amendment was defeated, 202-217; all of the votes in favor of the amendment came from House Republicans.
The FOM expansion was the subject of fierce lobbying by banking and credit union trade groups. The bankers contend that the FOM expansion represents a power-grab by credit unions, while credit union groups said it would allow them to move into areas that have been abandoned by banks.
Jim Nussle, president/CEO of the Credit Union National Association said he was pleased with the House’s decision to include the FOM provision.
“This bill will let credit unions do more of what they do best: promote financial well-being and advance the communities they serve,” Nussle said.
The bill now goes to the Senate, where its future is uncertain. The Biden Administration has said it supports the bill.