Frank: Credit Unions Should Have Some CRA and NCUA May Have Been Too Harsh to Community Credit Union

WASHINGTON – Representative Barney Frank (D-Mass.), the ranking Democratic member of the House Financial Services Committee has spoken out to clarify his remarks on applying the Community Reinvestment Act to credit unions. He is also preparing a letter for NCUA looking into the agency’s response to the $1.4 Community Credit Union’s balloting to become a mutual bank. Frank said that while he may have spoken too quickly about applying the Community Reinvestment Act to credit unions he nonetheless stands by the idea. “This is not something especially new for me,” Frank said. “I have long felt that credit unions could and probably should have some form of CRA in place.” In an early morning talk on June 9 before the Massachusetts’ Banking Association, Frank told bankers that he would be looking into applying CRA to credit unions, according to published media reports. Frank explained that he had meant to deliver more nuanced remarks to the bankers which would have emphasized credit unions having something like CRA but not the same thing as banks have. “I don’t think credit unions need the same sort of CRA that banks have, but I think some form of CRA would be useful,” Frank said, making the point that state chartered CUs in his state have a CRA requirement. He also implied that a CRA requirement wouldn’t be too burdensome because he expected that most credit unions would be able to comply easily with any CRA requirements because of the nature of their work. On the matter of Community CU, Frank said he is writing NCUA a letter about the agency’s handling of Community’s case, commenting that it may have been “too stringent” and saying that he “wants more information.” “I have told banking interests that I am not going to go along with restricting credit unions’ fields of membership or taxing them,” Frank said. “But I also think a credit union needs to be able to leave this charter if it believes that’s in its best interest.” -