Credit unions are not sure what to make of NCUA's latest effort to measure community reinvestment by credit unions. They wonder whether the NCUA initiative will be adequate in providing meaningful data to Congress, and most of all, whether it's necessary.
But the truth is nobody likes it.
NCUA is shying away from using the "community reinvestment" terminology that has toxic implications for credit unions. It conjures up visions of the Community Reinvestment Act, something credit unions have fought for years. It also reminds people of a controversial initiative launched by former NCUA Chairman Norm D'Amours, called Community Action Plan, known in many circles as "CRA-lite." So NCUA is calling the new effort a Community Service Program. Get it?
Meantime, the White House put a temporary halt to the program last week when it notified NCUA they had to issue it for public comment before enacting it. So NCUA set an extraordinarily short comment period-just five days, Feb. 23-Feb. 28. Still, the public comments are expected to delay the data collection for some time.
The worry among some in the credit union movement-NAFCU has already weighed in against it-is that by using data from NCUA's automated examination program, AIRES, the program will do little more than measure the income levels of borrowers, something both the National Community Reinvestment Coalition and the Woodstock Institute used to conclude that credit unions were not providing adequate services to the underserved. But as one trade association executive told us, there is much that the AIRES data does not properly measure, such as deposits, for one thing. Or special programs such as check cashing, payday lending or financial education that have proliferated in the credit union movement in recent years, specifically with the goal of serving the underserved. Then there's field of membership. Not every credit union is authorized to serve what may be considered underserved communities.
The Credit Union Journal's Ed Roberts can be reached at 202-434-0334, or at eroberts
