The American Bankers Association along with 51 state bankers associations from every state today asked House Rules Committee members to reject including credit union charter enhancement legislation as part of H.R. 2543, the Financial Services Racial Equity, Inclusion and Economic Justice Act.
H.R. 7003, which has been added to H.R. 2543, is “self-serving” credit union legislation that, according to the banking associations, is “masquerading as a financial inclusion initiative.” The bill would expand field of membership and commercial lending authority for tax-exempt credit unions by claiming those charter enhancements would improve access to financial services in underserved areas. Community credit unions can already serve underserved areas if they identify a local need and choose to do so, the banking groups pointed out.
“The absence of Community Reinvestment Act requirements on credit unions in this legislation is extremely troubling,” ABA and the state associations wrote. “Any sincere effort to improve financial inclusion through credit unions must include comparable mechanisms to ensure accountability. Credit unions regularly tout their commitment to low- and moderate-income communities, so they should welcome the opportunity to demonstrate that taxpayer dollars are being spent as intended.”
The legislation also creates a highly controversial new loophole in the credit union business lending cap, which Congress put in place to keep the industry focused on its specified mission of “meeting the credit and savings needs of consumers … through an emphasis on consumer rather than business loans.”