WASHINGTON–CUNA and NAFCU have taken different positions on a new housing bill, with CUNA rejecting any suggestion the legislation increases regulatory burden, saying it does just the opposite.
At issue is the American Housing and Mobility Act introduced by Sen. Elizabeth Warren (D-MA) and other co-sponsors. Both credit union trade groups expressed relief at being spared compliance with the Community Reinvestment Act after having been included under CRA rules in a similar bill in the prior Congress. Language in the new bill codifies the existing NCUA regulations for how credit unions serve underserved communities
CUNA sent a letter of support for the 2019 American Housing and Economic Mobility Act, but NAFCU has said it has concerns with the proposal.
“We appreciate that the bill seeks to allow all types of credit unions to add underserved areas to their fields of membership,” said NAFCU EVP/General Counsel Carrie Hunt. “However, we have concerns about the new regulatory and examination burdens that would be placed on credit unions that add underserved areas. While the bill makes improvements over the previous version, NAFCU continues to have concerns about some of the language as we want to ensure that credit unions that want to assist communities that other institutions have left behind are not subject to new CRA-like regulations, just under a different name."
NAFCU said the bill would introduce new regulatory burdens via Section 204 for some community chartered credit unions and credit unions that seek to add underserved areas. NAFCU-member credit unions are being offered the association’s full analysis of the bill here.
‘We Think It’s a Good Thing’
During a call with the media, CUNA’s chief advocacy officer, Ryan Donovan, said CUNA is “very proud to support” the legislation. Donovan said he understood there had been reports that “not everyone thinks this is a great thing that Sen. Warren has removed her CRA provisions and removed obstacles to serving underserved communities, but we think it’s a good thing. As we worked with the senator’s office, one of the things we wanted to make sure was that the bill provided credit unions with opportunities without saddling them with additional regulatory burdens.”
In helping to draft the bill, Donovan said CUNA drew on existing legislative requirements and even “literally cut and pasted” provisions from the chartering manual.
“Regulatory burdens have actually been reduced,” said Donovan. “Legislation another trade association has supported would make (compliance) an annual requirement, but under the legislation we support it’s part of the examination cycle, which for most credit unions is not an annual event but occurs every 18 months.”
‘Tremendous Opportunities’
Donovan called the American Housing and Mobility Act a vast improvement over the prior legislation.
“This presents tremendous opportunities for credit unions to expand into underserved areas,” said Donovan. “The banking trade groups have said they want to see credit unions fulfill their mission of serving people of modest means, and these provisions would do that.”
Warren’s Statement
In a statement, Warren said the legislation will “help bring down costs for renters and buyers, level the playing field so working families everywhere can find a decent place to live at a decent price, and takes the first step to address the effects of decades of housing discrimination on communities of color.”
Warren said to offset the cost of the legislation, it includes language that returns the estate tax thresholds to their levels at the end of the George W. Bush administration and institutes more progressive rates above those thresholds. “These changes will affect only about 14,000 of the wealthiest families in the country,” Warren said.
Other Provisions of Bill
According to a statement from Warren, the American Housing and Economic Mobility Act will:
- Control the cost of renting or buying a home by leveraging federal funding to build up to 3.2 million new housing units for lower-income and middle-class families.
- Reduce the cost of housing across America by creating incentives for local governments to eliminate unnecessary land use restrictions that drive up costs. The bill puts $10 billion into a new competitive grant program that communities can use to build infrastructure, parks, roads, or schools. To be eligible, local governments must reform land use rules that restrict production of new affordable housing.
- Provide assistance to people hurt by federal housing policy failures through two targeted new programs:
- Down payment assistance to communities historically denied mortgages by the government. The federal government denied Black borrowers mortgage subsidies as late as the 1960s, stripping them of opportunities to build wealth. As a first step to address the resulting wealth gap between white and Black families, the bill provides down payment grants to first-time homebuyers living in formerly redlined or officially segregated areas.
- Support for families whose housing wealth was destroyed by the financial crisis. The bill invests $2 billion to support borrowers with negative equity on their mortgages, predominantly in suburban and rural communities.
- Hold financial institutions accountable for providing access to credit for all Americans. The bill would strengthen obligations under the Community Reinvestment Act (CRA) to provide credit to low- and moderate-income communities by extending the law to cover more non-bank mortgage companies, promote investment in activities that help poor and moderate-income communities, and strengthen sanctions against institutions that fail to follow the rules, reads a statement from Warren.
- Promote mobility by strengthening anti-discrimination laws and improving the housing voucher program. The bill prohibits housing discrimination based on sexual orientation, gender identity, marital status, veteran status, and source of income. The bill also makes it easier to use housing vouchers in neighborhoods with good schools and good jobs and allows tribal housing authorities to administer their own voucher programs.
The Co-Sponsors
The bill’s cosponsors in the Senate include Sen. Kirsten Gillibrand (D-NY) and Sen. Edward Markey (D-MA.), and in the House Reps. Cedric Richmond (D-LA), Barbara Lee (D-CA), Gwen Moore (D-WI), Elijah Cummings (D-MD), Mark Pocan (D-WI), Ayanna Pressley (D-MA), Rashida Tlaib (D-MI), Susan Wild (D-PA.), Eleanor Holmes Norton (D-DC), Steve Cohen (D-TN), Jamie Raskin (D-MD), Ro Khanna (D-CA), Joe Kennedy III (D-MA), and Suzanne Bonamici (D-OR).