Wisconsin's state-chartered credit unions scored a small victory when the state Legislature adjourned for the year Thursday without considering a bill that would have required some of them to prove to regulators that they adequately serve people of modest means.
The bill, introduced in late February, would have essentially established Community Reinvestment Act-like requirements for state-chartered credit unions with more than $100 million of assets.
Thirty-four of Wisconsin's 260 state-chartered credit unions have more than $100 million of assets.
The state's credit unions opposed the bill, which failed to make it out of an Assembly committee before the legislative session wrapped up.
Brett Thompson, the president and chief executive officer of the Wisconsin Credit Union League, called the bill would have created an "added burden for credit unions."
Rose Oswald Poels, senior vice president of the Wisconsin Bankers Association, said that bankers supported the bill but that it was introduced too late in the session for it to gain much traction. Still, it was "a good first step," she said in an interview Friday.
Specifically, the legislation would have established a system for grading credit unions' efforts to market to people of modest means. They would have been required to document with the state's Office of Credit Unions the geographic distribution of loan applications, the locations of branches and automated teller machines, and their community outreach programs.
Credit unions would have been scored on a scale of 1 (excellent) to 5 (unsatisfactory). The score would have been taken into account when a credit union attempted to add branches or merge with another credit union.
Only two other states, Massachusetts and Connecticut, have laws in place that require state-chartered credit unions to document their efforts to meet their communities' credit needs.
A CRA bill for credit unions was introduced in the California Legislature last year but it was later amended and now would only establish "best-practices" guidelines that would be voluntary. The California Legislature is in the second year of its two-year session and is still considering the legislation.
Some Democratic members of the House Financial Services Committee said last month that they were interested in expanding the Community Reinvestment Act and applying it to federally chartered credit unions and mortgage lenders.
