CRA feedback published; NAFCU maintains opposition to CU inclusion
The Federal Reserve Thursday published a summary of feedback from various roundtable discussions on ways to modernize the Community Reinvestment Act (CRA). NAFCU has strongly opposed extending CRA regulations to credit unions and will continue to advocate against additional constraints on credit unions.
The CRA was enacted in 1977 to encourage banks to meet the financial needs of the communities they serve. Since consumer safeguards and fair lending are already a part of credit unions' statutory and regulatory fabric, the CRA does not apply to the industry.
The Fed held roundtables on the issue between October 2018 and January 2019. Of note in the summary, many bankers and community stakeholders said they would like the CRA to be expanded to credit unions, as well as other companies like insurance and fintech.
NAFCU consistently works to set the record straight on the differences between credit unions and banks as the banking industry continues to lobby to have their requirements relaxed while trying to put the requirements on credit unions. The association has repeatedly highlighted that credit unions have not engaged in the illegal and discriminatory practices of banks, including redlining, because credit unions were established to offer provident credit to any member in their field of membership and therefore should not be subject to the CRA.
NAFCU efforts also led Sen. Elizabeth Warren, D-Mass., to reconsider legislation that would have subjected credit unions to the CRA. While the revised bill wouldn't subject credit unions to CRA provisions, it would create new regulatory burdens for some community chartered credit unions and credit unions that seek to add underserved areas.
A Treasury report last year offered recommendations to modernize the CRA; credit unions remained exempt in that report.
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