The nation’s top official in charge of supervising credit unions today asked for “flexibility” should Congress decide to apply the Community Reinvestment Act to the institutions, saying not all credit unions are the same.
During a House Financial Services Committee oversight hearing, Rep. Emanual Cleaver (D-Mo.) said he has become “increasingly concerned” about credit unions. He cited Navy Federal Credit Union, which allegedly discriminated against Black and Latino individuals seeking home loans, and Citadel, which recently paid $6.5 million to resolve Justice Department allegations that it had engaged in redlining. Cleaver pressed National Credit Union Administration Chairman Todd Harper on his agency’s oversight of large credit unions.
“One of the things I’m concerned about is [Navy Federal and Citadel] are not involved with CRA,” Cleaver said. “And maybe they ought to be subject to the same requirements as the banks, of which they are in many cases larger.”
Harper said that Navy Federal would be the 25th largest institution in the country if it were a bank. He also noted that Congress has exempted federal credit unions from CRA requirements, although states such as Illinois and New York have adopted rules to apply CRA-like requirements on credit unions.
“If Congress were to move forward on CRA and applying it to credit unions, I would ask for flexibility given there are many different types of credit union charters overall,” Harper said.
Harper also stressed that the decision whether to apply the CRA to credit unions was one for Congress, not regulators. “What we can do within our existing authorities is to apply fair lending laws and examine for fair lending laws, and in recent years we’ve increased the amount of resources dedicated to fair lending to conduct more exams at large financial institutions,” he said.
Harper also was questioned by Rep. Bill Foster (D-Ill.) about a cyberattack last year that affected 60 credit unions and whether the NCUA should have the same authority to regulate credit unions’ third-party relationships as bank regulators have with the institutions they supervise. The NCUA chairman said the lack of vendor authority “is a growing regulatory blindspot” that the Government Accountability Office, Financial Stability Oversight Council and NCUA’s inspector general have all called on Congress to close.
“I agree with them on the need,” Harper said.
