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Instead of applying the Community Reinvestment Act to credit unions, Congress could help underserved communities more by expanding credit unions' ability to serve underserved areas and make member business loans, NAFCU President Fred Becker said in a letter to House Financial Services Chairman Barney Frank, D-Mass.

"From NAFCU's perspective, the discussion regarding how credit unions may better assist the underserved must center on how credit unions may better serve their members, and thus provide a benefit tothose in their field of membership," the NAFCU president wrote Friday. Since credit unions must serve all those within their membership fields, he said, they "should not be shackled with regulatory requirements and arbitrary benchmarks that detract from the services that they provide to their members."

NAFCU "does not support credit unions being subject to any type of Community Reinvestment Act (CRA) type requirements," he said.

Frank has said that he wants to take a look at the CRA and see how it may be applied beyond the banking industry. The law was passed three decades ago to address banks' redlining.

Becker, in Friday's letter, said credit unions' role in providing credit to consumers has been a steadying influence on the economy since the Great Depression, and this influence has been evidenced time and again by the flight to safety of consumer deposits and lower delinquencies on mortgages and consumer loans than banks have experienced.

Congress could help facilitate greater private investment in low-income communities, and improve the credit union charter, he said, by revising the Federal Credit Union Act to permit any credit union, regardless of charter type, to add underserved areas to its field of membership. NAFCU also supports NCUA's current ability to regulate how underserved areas are defined, Becker noted.

The NAFCU president added that credit unions could also help strengthenthe economy and the labor force through more small-business lending. He urged that Congress pass an increase in credit unions' MBL cap, which is currently set at 12.25 percent of total assets.

"Unlike many banks, credit unions stand ready to assist our nation's small businesses with their lending needs," he urged. "While there are a number of credit unions at or approaching the arbitrary cap, many more have capital to lend but have not fully developed their business lending programs because of this artificial and arbitrary limitation on these programs."