CEO Update: Opposing Expansion of the Community Reinvestment Act (CRA)

As you all know, DCUC has been actively defending the industry’s tax exemption amidst a concerning amendment proposed in the 2025 National Defense Authorization Act (NDAA). This effort involves numerous phone calls, meetings, grassroots campaigns, emails, and letters. It is worth every minute, and it is our honor to stand by and support our member credit unions.

While DCUC remains focused on protecting credit union tax exemptions, another bill is set to make its way through the House and Senate later this month. Despite having some provisions that DCUC would strongly support, the  American Housing and Economic Mobility (AHEM) Act of 2024, sponsored by Senator Elizabeth Warren & Congressman Emanuel Cleaver, also includes concerning language and proposed regulations. The official bill text and summary can be found here.

One of the policy provisions that DCUC would strongly support would be the proposal to extend eligibility for VA home loans for first-time buyers, specifically to those who are direct descendants of certain veterans. DCUC finds this to be especially important since many of these veterans were unable to use their guaranteed home loans due to racial inequities over the years.

DCUC would also support the bill’s call to increase investments in key housing programs, including the Public Housing Capital Fund, the Native Hawaiian Block Grant Program, and several rural housing programs. Many beneficiaries are veterans who need support. Plus, it makes sense considering that many of these areas are either neglected or face challenges due to nearby multimillion-dollar estates driving up property values which in turn makes housing unaffordable.

We expressed our support for these policy initiatives in our meeting with Senator Warren’s office on May 30, 2024, and received a positive response from the Senator’s office following our meeting.

However, DCUC did not hesitate to draw a strong red line when discussing Section 204 in the Senator’s proposed bill. If this section is approved as part of a final amendment, DCUC believes it would increase scrutiny through CRA examinations and public hearings for credit unions with more than 100,000 members. The potential impact of these proposed regulations still remains unclear, especially in regard to different types of charters. Thus, the language leaves final rulemaking in the hands of the NCUA and grants a one-year period before implementation.

Of note, the impact would extend to credit unions with 75,000 members as it would force them to consider the consequences of increasing their membership due to potential mergers and bank acquisitions. As with any regulations, once implemented, DCUC anticipates the floor will drop even lower since CRA already applies to all banks. Once this legislation passes, let’s just say adverse consequences tend to follow.

To be frank, this is unacceptable to DCUC and its member credit unions. We were very clear about our opposition in
our meeting with Senator Warren’s office. And even though we said we could not support any CRA legislation that would expand to credit unions, Senator Warren’s office acknowledged our role as a trade association and appreciated our candor. Here is our recent comment in the press regarding the bill: (read the full article here)

​“Credit unions have an exemplary record of member service to stand on. This is why Congress has not seen fit to impose punitive CRA requirements on them, and there’s no reason to do so now. “

“The member-centric structure of credit unions is the right model to ensure that consumers are treated fairly.”

A strong, collaborative effort in opposing this bill is needed to rally credit union supporters on Capitol Hill and ensure its defeat on the floor. A “soft opposition” approach suggests acceptance, and we would never negotiate a bad deal to curry favor on future legislation. When the bill is introduced at the end of the month, DCUC will mobilize another grassroots effort to defeat this bill. Stay tuned for updates.

In the meantime, I want to thank each of you for your efforts and support these past few weeks. Your involvement and contributions are vital to our success and as always, thank you for your commitment to serving those who serve our country.