WASHINGTON – Mainstream credit unions, mortgage companies and insurers would be required to comply with the Community Reinvestment Act under a bill introduced this morning in Congress.
The proposal would also broaden the CRA in several ways, by requiring banks and credit unions to lend to racial minorities in addition to poorer communities in order to comply with the law.
It would also boost scrutiny of institutions to see that they are following the law and assign lower CRA ratings to banks that engage in predatory lending.
Credit unions have fought having CRA extended to them since its 1977 enactment, arguing it was passed in order to require banks to address findings of so-called redlining, when poorer communities were ignored in favor of wealthier markets. But some lawmakers say the vast expansion of credit unions, especially those authorized to serve entire communities, makes it imperative that they also be induced to provide equal service to all portions of the fields of membership.
The new bill would not apply to more than 1,000 credit unions that are designated as low-income by NCUA, which are already presumed to be attending to lesser affluent communities.
