It is sure to raise the level of debate in Congress on whether credit unions should have some kind of Community Reinvestment Act-like requirement. That is because the GAO study was based on more recent data, from 2004, than NCUA’s, which only measured up to 2000--before the massive shift to community charters among credit union took affect. Even more troubling, the GAO study shows a greater portion of the consumers served by banks, than by credit unions, are considered of low- or moderate-income.
The GAO found that the portion of credit union members considered low income declined from 16.4% to 14.5% between 2000 and 2004; and the portion considered moderate income fell from19.3% to 16.6%. During the same period, when the number of community chartered credit unions doubled to more than 1,000, the portion of credit union members considered upper income rose from 42.6% to 48.8%. The make-up of the banks’ consumers remained about the same during this period. The data appears to support the banks’ criticisms that the continuing expansion of credit unions has coincided with a shift form their original focus of serving people of modest means. (CU Journal)