In reading a recent article in The Credit Union Journal's online newsletter (cujournal.com) titled, "Who Says Credit Unions Don't Do CRA?" I was happy to see a growing trend identified by your publication. Credit unions have continued to grow over the recent years, picking up momentum as they reach more members in more diverse communities.
Although credit unions are not required by law to comply with the Community Reinvestment Act (CRA), it would behoove many to voluntarily take steps to ensure they are in compliance. By being proactive and voluntarily complying with CRA regulations, credit unions can more effectively compete with banks in their respective fields of membership; can identify emerging customer markets; can delay the implementation of a mandatory credit union CRA compliance law; and can reduce potential attacks from consumer advocacy groups.
Also, it is much easier for credit unions to voluntarily comply with CRA than it would be if the institutions were being required by legislation. Credit unions can save money by implementing CRA compliance software now as opposed to waiting and hiring compliance officers as a result of a federally mandated law. If credit unions wait until the federal government takes action, they may get hit with stricter, less business-friendly regulations that actually do more harm than good to the communities in which the laws represent.
The credit union community has built its reputation on being more concerned with members' needs, because they are shareholders. If it wishes to maintain that reputation, credit unions would do well to be proactive when it comes to analyzing its FOM community and creating products and services to maintain its good public standing.
The additional cost of hiring and training compliance officers is much greater than using existing marketing and administrative staff to analyze available market demographic data. These readily available CRA compliance tools can help credit unions analyze their community demographics, compare service to the community relative to banks in their area and identify emerging markets within their membership base.
Credit unions need to consider what could and potentially will happen in the near future. Get ahead of the game and turn this into a competitive advantage. With the help of available CRA analytical tools, your readers should show better service to the community, more lending volume to their institution and a higher number of diverse and satisfied members.
Leonard Ryan, President
QuestSoft
Laguna Hills, Calif.
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