House Passes CDFI, Remote Notarization Bills
Credit union trade groups expressed support for both a CDFI and remote notarization bill passed by the House. Learn why.
Credit union trade groups express support for both bills; Bank Secrecy Act legislation also passed.
The House on Wednesday passed bills to allow remote notarization and to make it easier for small financial institutions to take advantage of the CDFI Bond Guarantee Program.
Faced with Republican demands for roll call votes on myriad bills being debated, Democrats combined those bills—including the notarization and CDFI measures—into a single roll call vote. With passage requiring two-thirds of House members in support, the bills were ultimately passed 336–90, with many Republicans voting for the measures.
H.R. 7733 would reauthorize the CDFI bond program. It also would reduce the minimum issuance amount from $100 million to $25 million and reduce the amount allowed to be held in a CDFI’s relending account.
“Unfortunately, small-sized CDFIs currently have difficulty applying for this financing directly because the current $100 million minimum financing amount is much higher than the amount many small CDFIs are seeking,” House Financial Services Committee Chairwoman Rep. Maxine Waters, D-Calif., said during debate on the bill.
As a result, Waters added, some CDFIs can only access the program by applying with larger financial institutions.
Rep. Ann Wagner, R-Mo., said the legislation would require the Treasury Department to review the effectiveness of the program.
“This increased accountability will allow Congress to make certain that the programs that we authorize match the needs of the communities to be served,” she stated.
The notary legislation would allow remote notarization of electronic documents and require states and courts to accept it.
“During the height of the COVID-19 pandemic, in-person notarizations were not only inconvenient but also posed a health risk,” said Rep. Frank Pallone, D-N.J., chairman of the House Energy and Commerce Committee, the panel that produced the legislation.
He added, “As our lives are returning to a new normal, it has become apparent that electronic and remote online notarizations are a valuable tool for facilitating commerce and making [notary] services more accessible. Such tools are particularly important for vulnerable populations like the elderly, underserved communities, and those lacking access to reliable transportation.”
Bank Secrecy Act
On Tuesday, the House also passed, 349–70, legislation that would require timely production to Congress of documents required under the Bank Secrecy Act. H.R. 7734 would require banks and credit unions to turn over those documents to Congress when a subpoena is issued.
Waters said that while there has been a long history of cooperation between the Treasury Department and members of Congress who want to examine Bank Secrecy Act documents, the department has placed restrictions on the examination of Suspicious Activity Reports.
Credit Union Response
Credit union trade groups supported both the notarization and CDFI legislation.
“Allowing remote online notarization will help consumers continue to conduct important transactions despite COVID and other restrictions, while the CDFI legislation will open up a source of low-cost capital for smaller projects in rural, urban, and tribal areas,” said Jim Nussle, president/CEO of CUNA.
NAFCU likewise endorsed the bills.
“Even before the COVID-19 pandemic, NAFCU had heard from its members that requirements for a notary to be physically present to certify documents was not keeping pace with innovation in financial services,” Brad Thaler, the organization’s vice president of legislative affairs, wrote to House members shortly before the vote.
In the letter, Thaler also affirmed NAFCU’s support of the CDFI bill, saying it would “have an immediate and positive impact on CDFIs and the communities they serve.”