NAFCU has said it has problems with bill, contending that while credit unions wouldn't be subject to the CRA, the legislation would subject them to CRA-like requirements.

CU Times is letting our readers judge for themselves and is publishing questions and answers from the two groups over three days.

Today, in the third and final part of the series, the two groups discuss specific details of the bill and the likelihood it will be enacted.

The answers below have been published verbatim, with only the grammar and formatting corrected. The answers provided appear in the order CU Times received them.

QUESTION: On balance, does this bill increase the regulatory burden that credit unions face? If so, are the tradeoffs worth it?

CUNA's Response:

NO. Given the responses provided and the research and analysis that CUNA has performed, we do not believe that the current legislation increases a credit union's regulatory burden. In addition, we are acutely aware of the fact that the alternative—subjecting credit unions to abiding by the Community Reinvestment Act—would: (1) ignore credit union's existing mission, structure, and history; (2) set credit unions up to fail when attempting to comply with CRA due to simultaneous statutory restrictions on field of membership, business lending, and investments, and (3) as a result, ultimately create safety and soundness concerns for credit union's financial portfolios. That result, we believe, is untenable and must be avoided.

NAFCU's Response:

Yes, this increases burdens. In NAFCU's experience, making a bad bill better can still result in a bad bill, so tradeoffs are not worth it. You have to fight for what is right at the outset.

QUESTION: Does the bill effectively deal with U.S. housing problems? Why or why not?

CUNA's Response:

SOMEWHAT. The American Housing and Economic Mobility Act of 2019 represents an important effort to improve access to the housing market for members of all communities and, in the process, properly recognizes the distinctions that exist between credit unions and banks when meeting community needs. The legislation rejects a one-size-fits all approach by explicitly excluding credit unions from the Community Reinvestment Act and instead codifying the already existing community outreach, input, and oversight policies that credit unions have been abiding by under National Credit Union Administration regulations found in the Chartering and Field of Membership Manual.

In terms of whether the bill effectively deals with U.S. housing problems, it is important to note that the bill does not attempt to address all problems facing the housing market. For example, one of the most important housing problems remaining from the financial crisis—the continuing conservatorship of the Government-sponsored-enterprises Fannie Mae and Freddie Mac and the future of the secondary mortgage market—is not addressed by the legislation.

NAFCU's Response:

The housing market is a critical aspect of our nation's economy, and the future of the housing finance system is of great importance to our nation's credit unions. There is a lot that needs to be fixed within our housing system, and we will continue to work with Senator Warren, Members of Congress and Administration officials to tackle this challenge.

QUESTION: What are the chances it or something like this will pass both houses and be signed by the president?

CUNA's Response:

SLIM. CUNA believes that it is unlikely that the Housing and Economic Mobility Act of 2019 will be signed into law given the existing political divisions in Congress and Senator Warren's candidacy in the upcoming 2020 election. Nevertheless, the legislation remains significant because it represents an acknowledgment by a leader of the progressive left that CRA should not be expanded to apply to credit unions.

NAFCU's Response:

Given that government control is currently divided between the parties, this bill, like many others, faces an uphill battle towards passage. NAFCU will continue to engage with Senator Warren's office to improve the bill as well as other proposals that may affect credit unions.

QUESTION: There is a provision requiring public hearings and comments regarding community charters. Does this add to the regulatory burden that credit unions face?

CUNA's Response:

NO. CUNA believes that, for something to add to the regulatory burden that credit unions face, it must ask credit unions to do something that they are not currently required to do. Each of the community charter requirements in Senator Warren's bill (relating to the business plan, public comment, and public hearing, etc.) mirror the NCUA's existing requirements for community charters under the Chartering and Field of Membership Manual. A side-by-side comparison of the bill's text and the existing regulatory requirements can be found here on CUNA's website.

In addition to the fact that credit unions already have these obligations, it is important to note that both CUNA and NAFCU supported the requirements when they were adopted by the National Credit Union Administration.

NAFCU's Response:

The new version of the bill also ties the NCUA's hands in ways that would please bankers. For example, the bill codifies in statute a recent NCUA rule that requires a public hearing and comment period in connection with a community federal credit union's application to serve an area that includes multiple politician jurisdictions and has a population greater than 2.5 million. NAFCU has opposed such a requirement due to bankers' attempt to politicize such hearings.

Related Stories:

—One Bill, Two Differing Views: CUNA & NAFCU Respond, Part One

—One Bill, Two Differing Views: CUNA & NAFCU Respond, Part Two