WASHINGTON—As one Congress ends, and numerous new members arrive in Washington for the next, the banking industry and its lobbyists are again pressing to have credit unions comply with the Community Reinvestment Act (CRA).
That has led NAFCU to call on Congress to urge it to ignore “misinformation” it said it being spread by bank lobbyists.
In a statement, NAFCU CEO Dan Berger reminded CRA was adopted as a punitive measure on banks due to discriminatory practices such as redlining and disinvestment.
"Given the behaviors of many banks that led to the 2008 financial crisis, and even the recent scandals such as those at Wells Fargo, it is apparent that banks have not learned their lesson and that is why we believe that the CRA still has a role to play for banks today," he wrote to House Financial Services Committee Chairman Jeb Hensarling (R-TX) and Ranking Member Maxine Waters (D-CA).
Berger added “credit unions are inherently invested in their communities, operating unlike other depository institutions with a not-for-profit cooperative structure and a common bond membership.
CUs ‘Not the Bad Actors’
"Credit unions exist to serve the people in their communities, including millions of low- and middle-income households in need of affordable loans and safe and sound financial products,” he stated. “Banks have been caught red-handed refusing loans to particular consumers based solely on their zip code and socioeconomic background. Additionally, they have been subject to a seemingly endless stream of billion dollar fines – roughly $174 billion ... Washington policymakers should reject bank lobbyists' attempts to deflect attention onto financial institutions that are not the bad actors."
Berger's letter and remarks came after the American Bankers Association, in a recent comment letter to the Office of the Comptroller of the Currency, called for credit unions to be subject to the CRA as the regulator takes another look at the law.
Instead of applying CRA to credit unions, Berger encouraged the lawmakers to instead take a second look at reinstating a modernized Glass-Steagall Act as regulators' attempt to loosen Volcker rule requirements on big banks.