The Greenlining Institute of Berkeley, Calif., is opposing legislation that would expand credit unions' business lending powers.
The Credit Union Regulatory Improvements Act of 2005 would raise the cap on a credit union's business loan portfolio to 20% of assets, from 12.5%, and exclude loans under $100,000 from counting toward the cap.
The group told Rep. Michael G. Oxley, the chairman of the House Financial Services Committee, in a June 17 letter that it would oppose the bill unless credit unions with more than $1 billion of assets are forced to comply with the Community Reinvestment Act.
The banking industry has been pressing Congress for years to apply the CRA to credit unions, and Keith Leggett, an economist with the American Bankers Association, said attaching the request to the business lending provision makes sense. "If you put money into a big commercial real estate loan, then it is not available to low- and middle-income families," he said.
But Greenlining, an umbrella group for a number of advocacy groups, made it clear that it shares no common cause with banks. Indeed, the letter said it "does not agree with banks that credit unions unfairly compete with banks."
"Almost always, those who raise unfair competition barriers fear effective competition," the letter said.
