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Credit unions would have parity with banks under Federal Home Loan Bank membership criteria under NAFCU-backed legislation introduced late Wednesday by Reps. William Lacy Clay, D-Mo., and Randy Neugebauer, R-Texas, the ranking member and chairman of the House Financial Institutions and Consumer Credit Subcommittee.

The bill would revise the Federal Home Loan Bank Act definition of a "community financial institution" to include small credit unions – those with less than $1.1 billion in assets. The statutory change would ensure credit unions parity under any final rule changes by the Federal Housing Finance Agency in the FHLB membership criteria.

FHFA has proposed changes in the criteria that would, among other things, require FHLB member institutions – all except "community financial institutions" – to maintain at least 10 percent of their assets in residential mortgage loans on an ongoing basis. Current rules apply this threshold only at application for FHLB membership. NAFCU raised concerns about the proposal in January.

"We thank Chairman Neugebauer and Ranking Member Clay for their leadership on this issue," said Brad Thaler, NAFCU's vice president of legislative affairs. "Many credit unions look to the Federal Home Loan Banks for mortgage liquidity, and this bill would help ensure that access. We look forward to working with the lawmakers and their staffs toward enactment of this important measure."

A similar provision was included in the "Financial Regulatory Improvement Act" passed by the Senate Banking Committee Thursday.