The Treasury Department released recommendations on April 3 to reform the Community Reinvestment Act (CRA), a 40-year old law meant to increase access to banking services to low- and moderate-income communities. Credit unions are not subject to CRA, as the law only applies to financial institutions insured by FDIC so the report’s only relevant credit union mention is a statement noting that CRA “does not apply” to credit unions.
The recommendations come after Treasury stated in a June 2017 report to the President that it would “comprehensively assess how the CRA could be improved.” In January, CUNA staff met with agency officials and explained that Congress explicitly excluded credit unions from the definition of “financial institutions” required to comply with the CRA because of credit unions’ not-for-profit cooperative structure, field of membership restrictions, and their lack of history of discriminatory lending practices. The exclusion of credit unions from today’s report is evidence that Treasury recognized that these rationales remain as true and relevant today as they were when the CRA was enacted.
For more information, contact Ryan Donovan, Shelton Roulhac, or Elizabeth Eurgubian.