An influential community group last week joined bankers in telling Congress that credit unions are not fulfilling their mission and are not sufficiently accountable to the communities they serve.
“Credit unions are not held accountable to fulfill community reinvestment activities, creating a regulatory inconsistency between banks and credit unions, even though both take deposits and should thus have similar requirements to meet needs and conveniences of the communities where they operate,” the National Community Reinvestment Coalition, the American Bankers Association and the Independent Community Bankers of America wrote last week in a letter to key House and Senate committees. “Absent such expectations, some credit unions are not making efforts to invest in lower-income areas.”
The groups go on to call on Congress to make credit unions comply with the Community Reinvestment Act and to closely examine the credit union tax exemption.
The NCRC, formed in 1990, is an association of more than 600 community-based organizations that work to increase the flow of capital into traditionally underserved areas. This is not the first time that the coalition has questioned whether credit unions are serving people of modest means. As far back as 2009, the NCRC said in a report, “While mainstream credit unions have made progress in lending to lower-income individuals, credit unions as a whole are not meeting public expectations for institutions that receive tax exemptions and are entrusted with the mission of serving people of modest means.”
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