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CUNA watches CRA developments
WASHINGTON (2/12/08)—It is important to note that credit unions are not a target of this week’s hearing on the Community Reinvestment Act (CRA), said Ryan Donovan, vice president of legislative affairs for the Credit Union National Association, Monday. The House Financial Services Committee has scheduled a “commemorative” hearing on Wednesday entitled "The Community Reinvestment Act: Thirty Years of Accomplishments, but Challenges Remain." (News Now, Feb. 6) “Obviously, we are watching this very closely,” Donovan said of the proceedings, “It would be naïve to believe the credit unions won’t come up at all during the hearing. But the committee chairman has never indicated an interest in applying CRA requirements to credit unions. However, we have been told that we are not the focus of the hearing and that this is not a legislative hearing." ” “In fact, Chairman Frank has been heard to say that if every lender operated as credit unions do, there would be no need of CRA,” Donovan added. He noted that the chairman, Rep. Barney Frank (D-Mass.), has said he intends to conduct a series of hearings on CRA this year and is looking at expanding its coverage beyond banks and thrifts to such entities as finance and insurance companies. "Regardless of the focus Wednesday, we know that at a hearing like this, anything can happen. Members of the committee and the witnesses can bring up just about anything--including credit unions--either in the testimony or during the question-and-answer period," Donovan said. There are no credit union witnesses scheduled among the 15 slated to appear, Donovan said, because “in general, the credit union industry does not have CRA expertise.” Congress enacted CRA in 1977 in response to the "redlining" of lower income and minority neighborhoods by banks and thrift institutions during the 1960s and early 1970s. The purpose was to ensure that for-profit financial institutions were adequately meeting the financial service needs of all parts of the communities from which they draw deposits. To see names and affiliations of witnesses, use the resource link below.
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