WASHINGTON–After one member of Congress suggested during a recent hearing that it may be time to require credit unions to comply with the Community Reinvestment Act (CRA), America’s Credit Unions and the Defense Credit Union Council have responded by suggesting that doing so could reduce access to credit for “vulnerable consumers.”
As CUToday.info reported here, during a House hearing held as part of the semi-annual review of the CFPB, Rep. Emmanuel Cleaver (D-MO) said allegations that Navy Federal Credit Union has engaged in biased mortgage lending that has hurt Black and Brown borrowers are evidence that it may be time for CRA-like rules to be put in place for credit unions.
Rohit Chopra, the director of the CFPB who was testifying before the committee, said he believes there is general agreement there should be compliance with CRA by non-bank mortgage lenders.
America’s Credit Unions Responds
In response, America’s Credit Unions’ CEO Jim Nussle stated in a letter to Cleaver that the trade group firmly believes “placing CRA requirements on credit unions would create new costly regulatory burdens without public benefit—a solution in search of a problem. This could lead to such changes having the impact of actually reducing access to credit for those in vulnerable communities. As such, we strongly oppose any effort to extend the CRA to credit unions.
Nussle told the congressman CRA was enacted due to banks’ discriminatory practices, while credit unions have a long track record of serving traditionally underserved communities.
“Credit unions have been coming to Congress for years asking to do more to help the underserved, only to be stymied and opposed by the banking lobby,” he added. “Banking representatives have traditionally opposed efforts for credit unions to expand in underserved areas, and even have previously sued the NCUA to prevent more credit unions from adding underserved areas.”
Eager to Address Concerns
In the letter, Nussle said America’s Credit Unions welcomes the opportunity to work with Cleaver to address his concerns and work on solutions that promote access financial services and end discriminatory practices in banking.
day, the Defense Credit Union Council (DCUC) sent a letter to Senator Elizabeth Warren (D-MA) and House Representative Emanuel Cleaver (D-MO) reaffirming its opposition to the Community Reinvestment Act-like (CRA) language as proposed in Section 204 of the “American Housing and Economic Mobility Act of 2024.”DCUC RespondsIn a separate letter, the Defense Credit Union Council (DCUC) said credit unions were not originally included in the CRA when it was established in 1977 due to their history of meeting the needs of underserved communities.DCUC said any compliance with CRA would mean increased costs that would likely lead to higher interest rates on loans, lower savings rates, and reduced member services.Instead of expanding regulatory burdens, DCUC recommended financial regulations should further the establishment and investment of new credit unions in underserved communities where banks may have previously withdrawn access and support for financial services.In early May, the DCUC noted that its president and CEO, Anthony Hernandez, and its chief advocacy officer, Jason Stverak, met with the office of Sen. Elizabeth Warren (D-MA) to discuss legislation the senator was reportedly considering related to CRA and expressed these concerns and the potential implications for credit unions serving military and veteran members.Consistent OppositionWhile parts of the proposed legislation would benefit credit unions, including the service members and veterans DCUC represents, the group said it has consistently opposed CRA or CRA-like legislation and is "pleased that other credit union organizations are now joining these efforts."DCUC added it "always aims to offer recommendations to reach balanced solutions with legislative and regulatory decision-makers and will continue to monitor any CRA-like legislation on behalf of all credit unions serving the financial needs of military and veteran communities."