This bill would allow privately insured credit unions to become members of the Federal Home Loan Bank (FHLB) system without federal deposit insurance. This would be a reduction on the regulatory requirements expected of community credit unions — a reduction this bill hopes will improve the U.S. housing market.

"The FHLB system is a cooperative, government-sponsored enterprise made up of 12 regional banks that offer financing to almost 7,400 members (banks, thrift institutions, insurance companies, and credit unions). FHLBs make loans (known as “advances”) and provide other credit services that members use to fund mortgages and other loans. Consolidated assets of the FHLBs totaled $913 billion at the end of calendar year 2014, including about $570 billion in advances."

The state banking supervisor in charge of a privately insured credit union’s charter would decide whether or not a credit union is eligible for federal deposit insurance. If the state banking supervisor fails to make a decision within six months of an application, the credit union would be considered to have satisfied the requirements.

FHLBS would be able to give advances to state-chartered credit unions that aren't federally insured — with the same standing on their interest in collateral that secures the security interest — as if they were advancing a federally-insured credit union.

Within 18 months of this bill’s enactment, the Comptroller General of the U.S. would have to conduct a study on the adequacy of insurance reserves held by a private deposit insurers that cover deposits made in a state-chartered credit unions. The study would also cover a private deposit insurers’ level of compliance with federal disclosure requirements, and would be delivered to Congress on its completion.