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News Now

Washington
House committee hearing to examine CRA
WASHINGTON (2/6/08)--The full House Financial Services Committee will hold a hearing next week on the Community Reinvestment Act (CRA). The hearing, “The Community Reinvestment Act: Thirty Years of Accomplishments, but Challenges Remain,” is scheduled for Feb. 13. Witnesses for the invitation-only event were not determined. According to CUNA Legislative Affairs Vice President Ryan Donovan, the hearing is being held to mark the 30th anniversary of the passage of the Community Reinvestment Act, and is not likely legislative in nature. As early as last summer, House Financial Services Committee Chairman Barney Frank (D-Mass.) indicated plans for a comprehensive review of CRA, which he said has eroded because of an increase in nonbank lenders who need not abide by such rules (News Now Sept. 12, 2007). Frank said it would be unfair to exclude any institutions from a CRA review, but acknowledged if every financial institution was like a credit union, CRA would be unnecessary. CUNA remains opposed to CRA for credit unions. Donovan said the Feb. 13 hearing represents the first in what is likely to be a series of hearings on the issue. He did not expect credit unions to be in the spotlight. “Regardless of the focus, we know that at a hearing like this, anything can happen. Members of the committee and the witnesses can bring up just about anything--including credit unions--either in the testimony or during the question and answer period,” he said. Congress enacted CRA in 1977 in response to the “redlining” of lower income and minority neighborhoods by banks and thrift institutions during the 1960s and early 1970s. The purpose was to ensure that for-profit financial institutions were adequately meeting the financial service needs of all parts of the communities from which they draw deposits.


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