Q: should credit unions be bound by the Community Reinvestment Act?

I would totally disagree with that. Most of our memebership lives in the community, and that's where we put our money. We don't send money abroad or to New York.

It goes back to the superfund and the superregulator. Congress wants to put everybody under the same blanket, and we all can't fit under that blanket.

I can't say, whether it would hurt credit unions, but it wouldn't help. Credit unions serve the community, and that was the intent of Community Reinvestment - to make sure banks served the people in the area.

I think that if he [Rep. Henry Gonzalez, D-Tex.] looks at the intent of CRA, that that's what credit unions do - they serve the depositors where they are located. It would be another layer of regulation to deal with. Credit unions are serving a specifically chartered membership, most of which is located in and around the community. In my mind, credit unions are already participating in CRA.

I think ultimately it will happen, and I don't have any problem with that. In our credit union membership, we have enough of a diverse cross-section that we can make the loans CRA would provide for.

If you have a field of membership made up of well-paid people, without any poor people, it may be harder. To have the NASA credit union comply with CRA would be difficult because people there are well-paid and the membership of NASA doesn't represent the community.

There would have to be specific exemptions dependent upon the field of membership. United's credit union would have difficulty complying with CRA because there's not a lot of poor people in it.

But it would be politically difficult for credit unions to say we're here to help the poor, or people who can't get loans elsewhere, but at the same time don't put us under CRA.

What would be important is that compliance with CRA would resemble what the field of membership looks like.

We're going to be looking into how credit unions perform in this area. If the credit unions are doing a good job, I want people to know, and if they're not we want to fix it.

If our investigation shows that credit unions aren't in compliance and need an incentive - another word is a club - to provide an adequate level of support to their membership, it would be a good idea. But I don't think they're going to need that.

Whatever the profile of a sponsor looks like, that's what their mortgage portfolio will look like. If a community has a different profile than that sponsor' credit unions may be faced with going outside of the membership, to make mortgages to fulfill CRA.

The credit union can't make loans to people outside its membership, and if its membership is in a high-tech industry, it would have a hard time finding people in its membership who fall under CRA.

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