CUs remain exempt in Treasury's CRA revamp efforts at NAFCU's urging
In an effort to modernize the Community Reinvestment Act (CRA), the Treasury Department on Tuesday issued a list of recommendations that include incorporating performance incentives to better serve the CRA's intended purpose and improvements to the act's examination process. At NAFCU's urging, the recommendations do not call for credit union involvement.
NAFCU met with Treasury Secretary Steven Mnuchin, Treasury Counselor Craig Phillips and others as part of the modernization project and strongly opposed extending the CRA to 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.
Other recommendations by Treasury to modernize the CRA include:
- updating the definition of geographic assessment areas to reflect today's trends in banking; and
- increasing the clarity and flexibility of CRA examinations.
The NCUA already examines and supervises credit unions to ensure compliance with current laws and regulations. The industry's nonprofit, cooperative structure guarantees that credit unions are created and exist to provide a service to specific fields of memberships, including those services that may have been lacking.
NAFCU continues its advocacy with Treasury, lawmakers and other regulators to provide the best possible environment for credit unions to thrive. The association strongly supports the deregulation efforts put forth by the current administration.
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