Rothfus Applauds House Passage Bill to Help Community Banks

Press Release

Congressman Keith Rothfus (PA-12) applauds the House passage of his bipartisan bill, the Federal Savings Association Charter Flexibility Act (H.R. 1426). Passed by the Financial Services Committee earlier this month by a vote of fifty-five to zero, this bill allows federal savings associations ("thrifts") to better serve their communities and adapt to changing economic circumstances. Both Congressman Rothfus and his Democrat co-lead Congressman Jim Himes (D-CT) offered the following remarks:

"The Federal Savings Association Charter Flexibility Act, H.R. 1426 is a common sense reform bill that will help to ensure that community banks, many of which have histories stretching back generations, can continue to serve the needs of Main Street businesses and families," said Congressman Rothfus.

"In financial services, trust is everything," Congressman Himes said. "Millions of Americans already have relationships with federal savings associations and would rather continue working together with a known and trusted partner than venture out into the unknown. Our bill makes it easier to expand the services these institutions can offer to more resemble those of a national bank, which in turn gives more options to families, communities and business."

Background:

Under the Home Owners' Loan Act (HOLA), mutual savings banks, cooperative banks, and other similar institutions must undergo an expensive and time-consuming process to change charters in order to offer a broader range of services. H.R. 1426 establishes a simple election process for such institutions to become newly-created Covered Savings Associations, which would allow them to operate with the same rights and duties as a national bank. The bill also includes important safeguards to prevent fire sales of assets and subsidiaries during the transition process while also preserving the ability of the Office of the Comptroller of the Currency (OCC) to enforce the law and prevent evasion.

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