With New Congress, Bankers Focus Their Sites on CRA

WASHINGTON – The new government study showing credit unions shifting their focus from people of modest means is expected to give rise to a renewed effort by the bankers to bring credit unions under the Community Reinvestment Act, as a condition to any broad regulatory relief bill, like CURIA. In fact, the advent of a Democratically controlled Congress, with its strong support for the credit union tax exemption, is historically favorable to CRA, with some members suggesting in the past bringing credit unions under the act. “Remember, in 1998, credit unions almost got CRA,” Keith Leggett, senior economist for the American Bankers Association told The Credit Union Journal. “I think you’re gong to see renewed interest in that, in light of the study.” In fact, there is some evidence the bankers have shifted their anti-credit union lobby from the tax exemption and to CRA. “It plays better with Democrats,” said CUNA lobbyist Dean Sagar. “It’s a tactic switch.” Signs of this new strategy have emerged in Missouri, where the Missouri Bankers Association have made a CRA-like requirement a condition to settling a decade-long fight over field of membership. If credit unions get into a legislative contest over CRA it could alienate some traditional allies, like the Woodstock Institute, and other community groups that have also called for CRA for credit unions. Complicating matters even more is the ongoing efforts by credit unions to return to the good graces of the consumer lobby, which split with credit unions over the long and emotional battle over bankruptcy reform.