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Gov. Duke calls for CRA review
ARLINGTON, Va. (7/20/10)--Federal Reserve Governor Elizabeth Duke on Monday called for a comprehensive update of the Community Reinvestment Act (CRA). CRA was enacted in 1977 in response to a practice known as "redlining," which refers to the failure to lend to lower-income and minority neighborhoods by banks and thrift institutions during the 1960s and early 1970s. The purpose of the law is to ensure that for-profit financial institutions adequately meet the financial service needs of all parts of the communities from which they draw deposits. According to Dow Jones Newswires, panelists taking part in the discussion, which was one of four CRA hearings being held by the Fed, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Office of Thrift Supervision, recommended that CRA be broadened. The panelists also called for additional enforcement, and suggested that CRA rules also be applied to credit unions. The Credit Union National Association (CUNA) opposes any effort to include credit unions under CRA requirements. CUNA maintains that by their nature and mission of "people helping people," credit unions already meet the financial needs of a broad spectrum of people that fall within their fields of membership, and play an active role in community development and growth. By virtue of their membership requirements, credit union products and services are offered within local communities and CRA requirements would add an unnecessary and costly regulatory burden to credit unions that already meet and exceed the intent behind CRA, CUNA has said.


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