DCUC continues to lead opposition to proposed CRA expansion discussions on Capitol Hill
WASHINGTON, DC (July 29, 2024) — The Defense Credit Union Council (DCUC) reaffirms its opposition to Senator Elizabeth Warren (D-MA) and House Representative Emanuel Cleaver (D-MO)’s Community Reinvestment Act-like (CRA) language proposed in Section 204 of the “American Housing and Economic Mobility Act of 2024.” DCUC first opposed the suggested CRA-like legislation and continues to be concerned about any additional requirements that could impede the ability of credit unions to reach out to lower-income populations.
The Council led the credit union industry’s opposition to CRA-like legislation back in May, when Anthony Hernandez, DCUC president/CEO, and Jason Stverak, DCUC Chief Advocacy Officer (CAO), met with the office of Senator Warren to discuss the proposed legislation and expressed these concerns and the potential implications for credit unions serving military and veteran members.
“Section 204 of the bill continues to impose reporting requirements on credit unions,” stated Jason Stverak, DCUC Chief Advocacy Officer. “Regardless of the terminology used, this represents a backdoor effort to implement CRA-lite reporting provisions without directly naming it as such.”
Stverak shared more of DCUC’s position on this issue in earlier months, explaining how “[r]edlining and other discriminatory lending practices have no place in our industry. In fact, the credit union ethos demands each institution to meet the credit and capital needs of the communities where they operate, including low- and moderate-income neighborhoods. It is very rare for a credit union to violate this ethos.”
Stverak continued by emphasizing how the expansion of CRA-type legislation on the entire industry is “unnecessary, burdensome, and could have the unintended impact of reducing access to credit for these vulnerable communities.”
DCUC maintains its position that while some have suggested that extension of CRA obligations would be unproblematic, it believes this view ignores the reality of the costs associated with implementing new and additional regulatory requirements. It is especially troublesome for small and medium-sized credit unions.
DCUC added how these increased costs would likely lead to higher interest rates on loans, lower savings rates, and reduced member services, and suggested instead of expanding regulatory burdens, financial regulations should further the establishment and investment of new credit unions in underserved communities where banks may have previously withdrawn access and support for financial services.
“Credit unions have an exemplary record of member service to stand on. This is why Congress has not seen fit to impose punitive CRA requirements on them, and there’s no reason to do so now,” said Hernandez. “The member-centric structure of credit unions is the right model to [ensure] that consumers are treated fairly.”
While parts of the proposed legislation would benefit credit unions, including the service members and veterans DCUC represents, DCUC has consistently opposed CRA or CRA-like legislation and is pleased that other credit union organizations are now joining these efforts.
DCUC always aims to offer recommendations to reach balanced solutions with legislative and regulatory decision-makers and is willing to work with other trade associations and leagues based on the response from its members in terms of opposing this bill.
“We will continue to oppose any CRA-like legislation on behalf of all credit unions serving the financial needs of military and veteran communities,” said Hernandez.
About Defense Credit Union Council (DCUC)
The Defense Credit Union Council is the trusted resource for credit unions on all military and veteran matters. By maintaining a close and constant liaison with the Pentagon, Capitol Hill, and NCUA, the Council champions the interests of credit unions serving our military and veteran communities by coordinating policy, procedures, and legislation impacting morale and welfare, financial readiness, and the delivery of quality financial products and services. Organized in 1963, the Council’s membership is comprised of more than 180 credit unions with over 37 million members. If you would like more information about this topic, please contact DCUC at hlaverty@dcuc.org.
