WASHINGTON—Although it has credit union support, NAFCU wants Congress to revisit several aspects of the Financial Services Racial Equity, Inclusion, and Economic Justice Act package, which includes the just-passed Expanding Financial Access for Underserved Communities Act, saying it brings greater regulatory burden.
In the letter to Congress, Vice President of Legislative Affairs Brad Thaler said it supports the bill, which would allow all types of federal credit unions to add underserved areas to their field of membership and adds "banking deserts," areas not within 10 miles of a branch of a financial institution, to the definition of an underserved area.
In addition, NAFCU also supports a proposal to permanently authorize the CDFI Bond Guarantee Program, the CDFI Bond Guarantee Program Improvement Act, which is also included in the package along with some other CDFI reforms aimed at aiding financial institutions, Thaler wrote.
Several Concerns
Nevertheless, Thaler said NAFCU has several concerns regarding a number of provisions included in the DEI package that the trade group said it will increase data reporting and disclosure requirement burdens on credit unions.
"While they may be well-intentioned, we must caution against the burden they stand to place on community financial institutions," wrote Thaler. "We believe that these provisions may prove counterproductive to the goal of increasing access to capital as institutions spend resources to comply, rather than provide them to aid members."
Additional Concerns
In addition to its concerns over provisions that would expand the authority of the CFPB, Thaler additionally called on lawmakers to update a current provision in the package that updates the definition of minority depository institutions (MDIs) to include women’s banks.