The losers of an effort challenging NCUA's stance on a community reinvestment requirement for credit unions said last week they won't back off and hope to convince Congress to look into whether credit unions are providing adequate service to the underserved.
The National Community Reinvestment Corp. will not appeal a federal court ruling dismissing its suit challenging NCUA's repeal of the Community Action Plan, or CAP, but hopes to press its case in other ways.
Goal Is To Get Hearings
"We are going to pursue this with the (House) Financial Services Committee and see if we can't get some hearings," said David Berenbaum, vice president of the NCRC, a coalition of groups aimed at facilitating community investment by financial institutions.
The NCRC bid comes just after the General Accounting Office issued a report indicating that credit unions may not be adhering to their traditional mission of serving the underserved and recommending that either NCUA or Congress create some kind of reporting mechanism to gauge compliance with the issue.
But Berenbaum said he has little faith that NCUA, even though it has pledged to study the GAO's recommendations, will take serious steps to address the issue, considering the agency repealed its own plan (CAP) to collect such data even before it went into effect.
"The current temperament at NCUA is not conducive to addressing this. It has to be an issue raised with Congress, and not NCUA," he said.
In dismissing the NCRC suit, the U.S. District Court for the District of Columbia found that there was no proof that NCUA did not follow the Administrative Procedures Act and acted improperly when the NCUA board voted in December 2001 with barely a week's worth of public notice to repeal CAP, a month before it was to go into effect.
NCUA Chairman Dennis Dollar, the main engine behind the CAP repeal, said he was pleased by the court's decision upholding the action.
In responding to the GAO's recommendation, Dollar said he has not changed his opposition to a Community Reinvestment Act-like requirement, but suggested the agency could develop some mechanism to gauge service to the underserved, as long as it is not burdensome and-or costly to credit unions, especially smaller credit unions. He has appointed an NCUA task force to study all of the GAO recommendations to see if and how they might be accomplished.
Little Support Seen
Berenbaum noted that the court ruling dismissing his group's suit was on procedural grounds and never got to the underlying matter, whether or not the federal regulator should be monitoring for service to the underserved.
John McKechnie, chief lobbyist for CUNA, said CUNA has been discussing the GAO report with the relevant members of Congress, including the House Financial Services Committee and representatives of Sen. Paul Sarbanes (D-MD), the ranking member of the Senate Banking Committee who sought input on credit union service to the underserved.
But McKechnie said he sees little congressional support for any new CRA-type requirements for credit unions, such as the one that was defeated as part of the debate over HR 1151, the 1998 CU Membership Access Act.
