WASHINGTON - Look for a push to apply the Community Reinvestment Act to credit unions if the Democrats retain control of the House later this year, as expected.
Barney Frank, the Massachusetts Democrat who chairs the House Financial Services Committee, drew laud applause last week when he told a gathering of bankers in Washington that he believes CRA should be applied to credit unions. Frank made his comments to more than 300 bankers attending the Independent Community Bankers Association’s annual government affairs conference.
Frank’s position is not new, but it came as the House was considering, then withdrew the credit union regulatory relief bill, known as CURRA, for CU Regulatory Relief Act.
The Financial Services Chairman has said before he would like to expand CRA to include other entities beside the banks and thrifts it applies to now. However, the House will probably wait to take up that initiative in the next Congress.
The CRA was enacted in 1997 to ensure that banks and thrifts that were accepting deposits from low-income communities and inner cities were providing services to those communities in return. In recent years as hundreds of credit unions have adopted community charters many in Congress have suggested that the same requirements should be applied to credit unions.
The credit union lobby is adamantly opposed to CRA, even as it has proved little burden to those in Massachusetts with has the only CRA in the country for credit unions.
The credit union lobby insists that CRA would be redundant because the purpose of credit unions is to serve everyone within their community–field of membership.
(c) 2008
