Removing Barriers Blog

CUNA Opposes CRA Language Included in Legislation Introduced by Senator Warren
Posted September 25, 2018 by CUNA Advocacy

Senator Elizabeth Warren (D-MA) introduced the American Housing and Economic Mobility Act, which seeks to enhance housing opportunities for traditionally underserved groups and create economic incentives for local governments to eliminate unnecessary land use restrictions. While CUNA agrees with much of the bill’s intent, the legislation would counterproductively harm credit unions by adding an unnecessary layer of examination compliance. The bill actually seeks to impose Community Reinvestment Act (CRA) requirements, which were enacted as a result of bank redlining and disproportionate discriminatory lending practices—explicitly not intended to apply toward credit unions, who by definition, serve their community as a cooperative non-profit entity.

Congress should consider the statutory chartered purpose of not-for-profit credit unions, which provide traditional retail and consumer-facing financial services to groups with a common bond. Unlike bank holding companies, broker-dealers, investment and private banks, and non-bank lenders—many of which cater to ultra-high net worth individuals and multinational corporations—credit unions are community-based financial cooperatives that exist as an alternative to these profit-driven banking models, to offer pooled savings and lending services for member-owners, many of them of modest means.

CUNA supports legislative efforts to ensure the American dream of home ownership is readily available to all Americans, and not impeded by Wall Street banks looking to profit from bad loans and foreclosures. Credit unions, however—the good guys in the financial services landscape—should not be caught up in the riptide. Let’s be clear: the banking industry would like nothing more than to see credit unions go the way of the S&Ls and Thrifts. Don’t be fooled: attempts by the banking industry to apply their punishments for dubious consumer practices onto financial cooperatives—the only alternative to banks—are distractions they hope will avert attention away from their own consumer protection failures.