A Senate bill introduced this week would allow privately insuredcredit unions to offer loans through the Federal Home Loan Banksystem.

Sens. Sherrod Brown (D-Ohio) and Rob Portman (R-Ohio) introducedthe CUNA-supported legislation on Thursday.

“Brown and Portman's legislation would provide more than 150privately insured credit unions in nine states –including Ohio–access to additional forms of liquidity through membership in theFHLB system,” said a press release from the senators' offices.

Under current law, non-federally insured credit unions areprohibited from participation due to a 1989 statutory change thatexpanded FHLB membership only to commercial banks and federallyinsured credit unions.

“This will make ts easier for Main Street credit unions to offermortgages to families and loans to small business. Expanding theeligibility of the Federal Home Loan Bank System toprivately-insured credit unions is long-overdue,” Brown said in astatement.

“By providing these financial intuitions with the ability tojoin the Federal home loan bank system, we help these communityinstitutions keep more local dollars invested in localcommunities,” the Democrat from Cleveland said.

There are currently 12 banks and more than 8,000 memberinstitutions in the FHLB system.

“This bill will help Ohio families and small businesses whocontinue to struggle through a weak economy by increasing theiraccess to mortgages and loans to buy homes and office space,” saidPortman, a Republican from Cincinnati.