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News Now

Washington
New CRA bill as expected excludes CUs
WASHINGTON (10/1/10)--Legislation that would strengthen the Community Reinvestment Act (CRA) examination process “to decrease the current problem of grade inflation” was introduced by Rep. Luis Gutierrez (D-Ill.) on Wednesday. As noted earlier this month by House Financial Services Committee Chairman Rep. Barney Frank (D-Mass.) speaking to a Massachusetts league meeting in Washington, D.C., the CRA legislation will not impose CRA requirements on credit unions. The legislation (H.R. 6334), known as the American Community Investment Reform Act of 2010 (ACIRA), would “expand the CRA beyond banks to the institutions that provide financial products in the modern financial services marketplace,” according to a release. The legislation would introduce an "outstanding" rating for financial institutions that show a “genuine and extraordinary commitment to their community” and would seek to “encourage safe and responsible lending” via the creation of a Community Development test. Current CRA requirements provide tests for lending, investment and service. The CRA rating and review processes would be “more open to public review and comment,” the release added. Gutierrez in a statement said that “it was the failure to include more of the financial services industry under the standards of CRA” that contributed to the financial crisis. “Had mortgage brokers, the subsidiaries of bank holding companies, and those that helped to finance so many of these toxic, predatory mortgages been held to the standards of the CRA, we might have avoided this crisis. That's one of the main goals of this bill." The bill is currently cosponsored by Reps. Maxine Waters (D-Calif.), Eddie Bernice Johnson (D-Texas), and Rep. Al Green (D-Texas).


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