Fifty-one state bankers associations wrote to lawmakers today opposing the credit union industry’s “unnecessary” charter enhancement efforts as part of The Expanding Financial Access for Underserved Communities Act. “Community credit unions can already serve underserved areas if they identify a local need and choose to do so [without legislation],” the groups wrote in a letter to House Financial Services Committee leadership, noting the legislation provides “the ability for credit unions to expand out of market, a reality that the credit union lobby has attempted to obfuscate in this debate. Congress should not help facilitate tax-exempt regional or national banks.”
The state associations pointed to the lack of requirements in the legislation comparable to the Community Reinvestment Act, from which credit unions are currently excluded, that would require them to prove their service to low-income communities. The legislation also creates a new loophole in the credit union business lending cap, “a necessary statutory element to ensure this tax-exempt industry continues to fulfill its specified mission of ‘meeting the credit and savings needs of consumers … through an emphasis on consumer rather than business loans,’” they said.
The letter cited analysis showing that credit unions increasingly target wealthy communities, serve wealthy consumers, and contribute to widening economic inequality, particularly as they continue to buy banks and expand into commercial lending.