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H.R. 299, Capital Access for Small Community Financial Institutions Act of 2015 1 (April 8, 2015)

handle is hein.congrec/cbo2141 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE COST ESTIMATE April 8, 2015 H.R. 299 Capital Access for Small Community Financial Institutions Act of 2015 As ordered reported by the House Committee on Financial Services on March 26, 2015 H.R. 299 would allow privately insured credit unions to become members of the Federal Home Loan Bank (FHLB) system. The bill also would direct the Government Accountability Office (GAO) to report to the Congress on privately insured institutions and their insurers. CBO estimates that implementing this legislation would have no significant effect on the federal budget. Enacting H.R. 299 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply. 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. H.R. 299 would permit state-chartered, privately insured credit unions to become members of the FHLB system. Under current law, such credit unions may only gain membership if they are also community development financial institutions. Based on information provided by the National Credit Union Administration, there are about 130 privately insured credit unions holding about $14 billion in assets that would become eligible for membership under the bill. CBO believes that it is unlikely that any advances made to these institutions would alter the financial condition of the FHLBs given the relative size of the credit unions to the FHLB system and the requirement that all advances be fully secured. Because these credit unions are privately insured, spending by the Federal Deposit Insurance Corporation would not be affected if an institution ultimately failed. The bill also would direct GAO to report to the Congress on the adequacy of insurance reserves held by private deposit insurers and whether privately insured institutions comply with federal disclosure regulations. The cost of the study would be less than $500,000, CBO estimates, and would be subject to the availability of appropriated funds.

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