WASHINGTON – Congress is expected to introduce legislation tomorrow that would broaden the scope of the Community Reinvestment Act to include securities firms, insurers, mortgage companies and credit unions.
The bill would require that all credit union submit a plan to NCUA on how it plans to provide services to minority and low- and moderate-income neighborhoods within their fields of membership. NCUA, which would assess each credit union’s compliance with their own plans evert two years, would be able to use compliance in deciding whether to grant requests to change charters, expand FOMs, merge or relocate branches.
CRA was crated in 1977 and applied to banks because Congress found the banks were "redlining" communities, that is, avoiding services in certain low-income communities.
Credit union representatives said yesterday they will fight any effort to extend CRA to credit unions.
"NAFCU opposes any effort to extend CRA to credit unions. CRA was passed by Congress in 1977 as a punitive measure in response to banks that were found to have "red-lined," discriminating in loan decisions against certain communities based on race," Fred Becker, president of NAFCU, told The Credit Union Journal yesterday. Credit unions, he insisted, "have a solid history of serving those of lesser income and minority applicants and have consistently outperformed banks in a variety of customer satisfaction and cost-effectiveness surveys."
CUNA said it will fight the CRA bill too. "We oppose legislation extending CRA requirements to credit unions," said CUNA President Dan Mica in a prepared statement. "The law was enacted because banks were redlining. There is no evidence of such behavior at credit unions."
