The American Bankers Association wrote today in opposition of the credit union industry’s latest attempt at charter enhancement. The Expanding Financial Access for Underserved Communities Act—which is currently scheduled for a markup in the House Financial Services Committee next week—“is simply a backdoor effort by the credit union industry to expand its membership rolls under the guise of financial inclusion,” ABA wrote in a letter to committee leaders.
While National Credit Union Administration rules require communities added to a credit union’s field of membership to be geographically contiguous to a credit union’s existing footprint, that is not a requirement in the legislation, ABA said. “This could suggest that the real motivation for this legislation is to enable credit unions to establish out-of-market footprints, rather than to serve low-income people close to home,” the association wrote.
ABA also pointed to the lack of requirements in the legislation comparable to the Community Reinvestment Act that would require credit unions to prove their service to low-income communities.