Congress Eyes Reforms to Community Reinvestment Act

WASHINGTON – (February 6, 2008) - In what is expected to be a first step to reforms, the House Financial Services Committee yesterday scheduled a hearing for next week to celebrate the 30th anniversary of the Community Reinvestment Act, the law that requires that banks and thrifts set out a plan to provide services to communities they serve and that regulators monitor that plan.

The hearings are expected to be the beginning of the process to expand the CRA, which could include credit unions and other financial services providers, such as insurance companies and mortgage banks.

Barney Frank, the Massachusetts Democrat who chairs the financial services committee, has suggested in the past that credit unions nationwide, including the ones in his state, should be subject to CRA. Massachusetts is the only state in the country that requires CRA for credit unions.

The credit union lobby, both CUNA and NAFCU, are adamantly opposed to extending CRA to credit unions. (Credit Union Journal)