Bill Text: NJ AR159 | 2022-2023 | Regular Session | Introduced
Bill Title: Urges Congress to amend Federal Credit Union Act.
Sponsorship: Partisan Bill (Democrat 2)
Status: (Introduced - Dead) 2022-10-11 - Introduced, Referred to Assembly Financial Institutions and Insurance Committee [AR159 Detail]
Download: New_Jersey-2022-AR159-Introduced.html
Sponsored by:
Assemblyman REGINALD W. ATKINS
District 20 (Union)
SYNOPSIS
Urges Congress to amend Federal Credit Union Act.
CURRENT VERSION OF TEXT
As introduced.
An Assembly Resolution urging Congress to pass legislation amending the Federal Credit Union Act to permit service to certain underserved areas.
Whereas, The Federal Credit Union System was created during the Great Depression to make credit available to people with limited means, and to stabilize the credit structure of the United States; and
Whereas, A credit union is a cooperative that creates a source of credit for their members; and
Whereas, A credit union is given a charter based on a territory and a proposed "field of membership", which is the common bond of the group the union intends to serve; and
Whereas, Seventy percent of credit union branches are in middle, moderate, and low-income communities; and
Whereas, More than half of home loans issued by credit unions are granted to borrowers of middle income or less; and
Whereas, While credit unions are expanding their presence in communities where their charter allows it, the presence of traditional banks is diminishing; and
Whereas, As of May of 2021 the Federal Reserve found that in the prior 16 years more than 7,800 bank branches closed while almost 20 percent of American households lacked adequate access to mainstream financial services; and
Whereas, The Federal Reserve has also found that between 2012 and 2019 rural areas experienced an 11 percent decrease in the number of traditional bank branches; and
Whereas, A recent study shows that underserved communities require local access to a trusted financial services provider for improved lifetime financial literacy; and
Whereas, Legislation currently pending in Congress as House Resolution 7003 (H.R.7003) will increase access to affordable financial services with no cost to the taxpayer; and
Whereas, H.R.7003 would remove constraints federal credit unions currently abide on business loan amounts in underserved areas; and
Whereas, H.R.7003 would expand the territory for credit union charters to include any area 10 miles from the nearest financial institution, or deemed by the National Credit Union Administration and the Federal Deposit Insurance Corporation as underserved by other depositories; and
Whereas, H.R.7003 would add underserved areas as an allowable field of membership for all federal credit unions, an extension of the freedom presently granted only to certain credit unions; and
Whereas, The gulf left by commercial banks can be filled by credit unions: an existing, market-based solution, proven effective for areas neglected by traditional financial institutions; now, therefore,
Be It
Resolved by the General Assembly of the State
of New Jersey:
1. This House urges the United States Congress to pass H.R.7003, the Expanding Financial Access for Underserved Communities Act.
2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Clerk of the General Assembly to the Majority and Minority Leaders of the United States Senate, the Speaker and Minority Leaders of the United States House of Representatives, and every member of Congress elected from New Jersey.
STATEMENT
This resolution respectfully urges Congress to pass H.R.7003, also known as the "Expanding Financial Access for Underserved Communities Act".
The Federal Credit Union System was formed to provide financial services to individuals of limited means and to stabilize the credit structure of the United States. Since its inception in the Great Depression, this system has proven itself a free market answer to communities overlooked or abandoned by commercial banks. The pandemic has ushered a hastening of bank branch closures, especially in rural and economically depressed areas. Almost 20 percent of American households now lack access to mainstream financial services.
Archaic rules regarding membership and business loan limits impede credit unions in their efforts to fill the need of low income and rural communities seeking mainstream, local banking and credit services.
H.R.7003 addresses the limitations of the Federal Credit Union Act by removing limits on certain business loans, expanding the definition of underserved areas, and allowing all federal credit unions to add underserved areas as a field of membership.
