DCUC Reaffirms Opposition to Proposed CRA Expansion Discussions on Capitol Hill

WASHINGTON, D.C. – Today, the Defense Credit Union Council (DCUC) sent a letter to Senator Elizabeth Warren (D-MA) and House Representative Emanuel Cleaver (D-MO) reaffirming its opposition to the Community Reinvestment Act-like (CRA) language as proposed in Section 204 of the “American Housing and Economic Mobility Act of 2024.”

​In the letter, DCUC stated how credit unions were not originally included in the CRA when it was established in 1977 due to their history of meeting the needs of underserved communities.
 
“Redlining and other discriminatory lending practices have no place in our industry. In fact, the credit union ethos demands each institution to meet the credit and capital needs of the communities where they operate, including low- and moderate-income neighborhoods. It is very rare for a credit union to violate this ethos. Thus, expansion of CRA-type legislation on the entire industry is unnecessary, burdensome, and could have the unintended impact of reducing access to credit for these vulnerable communities. Although some have suggested that extension of CRA obligations would be unproblematic, this view ignores the reality of the costs associated with implementing new and additional regulatory requirements. It is especially troublesome for small and medium-sized credit unions.”
 
DCUC added how these increased costs would likely lead to higher interest rates on loans, lower savings rates, and reduced member services. DCUC suggested instead of expanding regulatory burdens, financial regulations should further the establishment and investment of new credit unions in underserved communities where banks may have previously withdrawn access and support for financial services.
 
In early May, Anthony Hernandez, DCUC president/CEO, and Jason Stverak, DCUC Chief Advocacy Officer (CAO), met with the office of Senator Warren to discuss the proposed legislation and expressed these concerns and the potential implications for credit unions serving military and veteran members. DCUC shared more of its position earlier this month, featured on CUToday.
 
“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," said Hernandez. “The member-centric structure of credit unions is the right model to [ensure] that consumers are treated fairly.” 
 
While parts of the proposed legislation would benefit credit unions, including the service members and veterans DCUC represents, DCUC has consistently opposed CRA or CRA-like legislation and is pleased that other credit union organizations are now joining these efforts. 
 
DCUC always aims to offer recommendations to reach balanced solutions with legislative and regulatory decision-makers and will continue to monitor any CRA-like legislation on behalf of all credit unions serving the financial needs of military and veteran communities.