CRA for Credit Unions Eyed in California

MONTEREY, Calif. – A new legislative threat emerged for state chartered credit unions in the Golden State in the form of a bill that would apply to credit unions the Community Reinvestment Act, which currently requires that banks and thrifts demonstrate their investment in the low-income communities they serve. Credit unions have been fighting off attempts to apply CRA on a national basis, in the face of several studies that question credit unions’ service to their communities. Bill Cheney, president of the California CU League, called the bill, appearing on the final day bills that can be introduced in the state Assembly, a ‘curve ball’ that credit union lobbyists hadn’t expected. "We need to defeat, and we will defeat this bill," Cheney told The Credit Union Journal, at the annual Big Valley Conference here. “It's a bad bill and it would make a bad law." In recent years, studies by the several community development groups, and the Government Accountability Office, have questioned whether credit unions are adequately serving low-income communities, prompting the banking lobby to press their case in Congress that the CRA should be required of credit unions. Only one other state, Massachusetts, has a CRA for its state chartered credit unions.