From a blog post published today in the ABA Banking Journal:
“Congress has the tools to make sure large credit unions do a better job of meeting their 1934 statutory requirement to serve people of modest means, and that starts with the Community Reinvestment Act.
For more than 40 years, CRA has required banks to demonstrate that they are meeting the credit needs of low- and moderate-income neighborhoods. However, the law never applied to credit unions because their charter already called for them to serve consumers in those communities. But the credit union industry is much different than it was in 1970’s, and large credit unions have increasingly forgotten why they received their tax exemption in the first place. Congress should help them remember.
There are 594 credit unions with $500 million or more in assets — holding about $1.27 trillion of the industry’s $1.6 trillion assets — that could be doing a better job of meeting the needs of low- and moderate-income communities. If these credit unions are in fact meeting the needs of low- and moderate-income people, they should have no fear of demonstrating that explicitly as banks must do. Quite simply, lawmakers should make large credit unions meet the same CRA requirements as the banks they compete with every day.”
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