Senator Elizabeth Warren (D - MA) introduced on September 26 legislation, American Housing and Economic Mobility Act, that would extend the Community Reinvestment Act (CRA) to more financial institutions, including credit unions that are not designated as low-income.
The bill will also promote investment in activities that help poor and middle-class communities and will strengthen sanctions on financial institutions that do not comply with the rules.
However, the bill would exclude 2,544 low-income designated credit unions from CRA requirements, including some of the largest credit unions in the country.
The bill further proposes billions of dollars of new investments into affordable housing trust funds.
To pay for the bill, Senator Warren proposes to return the estate tax thresholds to their levels at the end of the George W. Bush administration and to impose more progressive tax rates above those thresholds.
Credit union trade associations, as expected, oppose the extension of CRA to any credit unions.
Read the press release.
Read the bill's text.
Read a summary of the bill.
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OK fine. CRA for credit unions. Then we should get the same investment options as banks have to meet CRA targets/goals/compliance. Can't do that with one hand tied behind our backs. And, by the way, want access to CRA money that is available for banks thru the CDFI process.
ReplyDeleteGreat ideas. And, while we are at it, since you want parity, then let’s wave in that 21% federal tax!
DeleteLet’s have real equality.
All the way!
What investment options do banks have that a CU doesn't? A federal CU can invest in anything they want as long as they pretend it's to fund employee benefits. I know of CU's that have equity portfolios, banks aren't allowed to trade stocks.
ReplyDeleteUltimately this is a non issue if NCUA is in charge of doing the CRA reviews. CU's don't even get compliance exams. Heck NCUA doesn't even do a real exam. Talk to your community banker they'll tell you how they get a month long exam of safety and soundness, and then another 3-4 weeks of a compliance exam. Then a CRA exam every few years