WASHINGTON—The Defense Credit Union Council said that while it generally supports the American Housing and Economic Mobility Act, the trade group cautions there is language in the bill that could lead to expansion of Community Reinvestment Act (CRA) requirements for credit unions.
The Act was reintroduced this week by Sen. Elizabeth Warren (D-MA).
Jason Stverak, DCUC Chief Advocacy Officer, told CUToday.info that while the bill does not directly address any expansion of CRA for credit unions, careful examination of Section 204 of the Act reveals it could have a similar impact.
“If you look at section 204 of the bill it creates CRA-like things that go on to credit unions if they expand into underserved areas—you have to create a business plan that has to be approved by the NCUA that puts metrics and targets into supporting these communities, and if you don't hit them you get punished,” he explained. “So, the bill puts in place many of the things credit unions have complained about regarding CRA, it just calls these things by a different name.”
These provisions to credit unions, as proposed in Section 204 of the Act, threaten to undermine financial access for vulnerable populations, including military and veteran communities, said Stverak.
“Credit unions, which already prioritize financial inclusion as not-for-profit, member-owned institutions, were deliberately excluded from CRA requirements because they do not engage in the profit-driven practices the law was designed to regulate,” he said. “Imposing redundant, costly regulations on credit unions will stifle their ability to serve underserved areas, drive up costs for members, and create bureaucratic obstacles that hinder financial expansion.
“Rather than burdening credit unions with unnecessary oversight, Congress should focus on reducing barriers to their growth, ensuring that military families and veterans continue to have access to affordable financial services,” continued Stverak. “At the same time, we recognize the need to address the affordable housing crisis and are actively engaging Congress to bring solutions that prioritize consumer protection, effective regulation, and improved housing supply. We strongly support Section 206, which aims to help veterans secure stable housing, and we are committed to working with the bill’s sponsors to improve and strengthen this legislation.”
As CUToday.info reported here, America’s Credit Union shared its general support for the bill, noting it does not include any expansion of CRA requirements for credit unions. ACU noted it has identified some concerns with the bill, and that there are opportunities to strengthen the Act.