WASHINGTON -- What would Washington be without the politics?
Credit Union Times reported Wed., May 2 online (www.cutimes.com) on the Community Reinvestment Modernization Act (H.R. 1289) understanding the legislative and political significance of it for credit unions, but only insiders might have anticipated the hornets nest the story stirred up in credit union politics. Rumors of an alleged trade-off by CUNA of CURIA for CRA ensued and accusations were flung at NAFCU, an alternately rival and cooperative organization, as the source of them.
CUNA President/CEO Dan Mica issued a statement on the matter: "I am truly saddened that this unfounded rumor campaign has broken out into public view. We are the in midst of serious business on behalf of credit unions on Capitol Hill, and it is in all of our best interests to put this matter to rest."
He continued, "Suffice it to say those who started the rumor campaign have done a great disservice to the credit union movement. However, I have seen that the matter has been brought to the attention of the leadership of CUNA and NAFCU, and I am confident that the issue is now behind us." According to a spokesperson, the war of words reached the board level.
"Trade association differences will probably always exist, but attacking individuals is absolutely and totally unacceptable," Mica added.
NAFCU President/CEO Fred Becker denied that his organization had started any rumors about CUNA agreeing to CRA requirements for credit unions in exchange for the Credit Union Regulatory Improvements Act (H.R. 1537). As to the substance of the matter, NAFCU Director of Legislative Affairs Brad Thaler commented, "We were pleased to see CUNA opposed to CRA...It's important to have both trade associations working to oppose CRA."
CRA has been a touchy issue for credit unions for many years and they often point to the fact that it was not included in the Credit Union Membership Access Act in the late 90s. Lobbyists note that CRA was imposed upon banks because of redlining and that no such evidence shows credit unions engaging in the same practices.
However, with the new Democrat-controlled Congress, the banking trades have been working that angle even harder, believing them to be more favorable to CRA. In fact the bill introduced by Congresswoman Eddie Bernice Johnson (D-Texas)--a current and past CURIA co-sponsor--would take back much of the loosening of bank CRA requirements gained during the Republican-controlled legislature and various federal banking regulatory agencies. The story that touched off the sparks quoted CUNA Vice President of Legislative Affairs Dean Sagar as stating, "It doesn't mention credit unions but my sense is that there is committee staff saying, if they pursue CRA, it would be on everyone with a capital E." While CUNA does not deny the accuracy of the quote, a spokesperson has said context is important to the background behind the rumors.
Sagar was a longtime House Financial Services Committee staffer under now Committee Chairman Barney Frank (D-Mass.), who is generally a strong proponent for CRA and controls the committee the bill has been referred to. Thus a rumor that had been going around Capitol Hill that CUNA was talking deal on CRA for CURIA was given additional fuel after the Credit Union Times story was allegedly circulated among NAFCU members as proof of CUNA's willingness to make a deal.
CUNA has vehemently denied any such discussions of a deal and is adamantly opposed to CRA, a spokesperson said. However, Mica determined that Sagar would no longer talk to the press on CRA, despite his solid background on the substance and knowledge of the committee. "We regret having to take Dean 'offline' in terms of talking to the working press about Community Reinvestment Act developments in the Congress," Mica said.
At virtually the same time, in a statement, Mica also said, "I want to also make clear that any reports from CUNA or me relating to restraining employees have either been improperly relayed or improperly interpreted. It goes without saying that we have tremendous confidence in our entire staff at CUNA, and we intend to move forward, as always, in a professional and effective manner in representing credit unions." This was in response to a second report posted to the Credit Union Times Web site, entitled, "CUNA Muzzles Sagar on CRA; Says Comments Being Misinterpreted and Used Against CUNA."
The Community Reinvestment Modernization Act would repeal the reduced reporting requirements instituted in the last couple years by the Comptroller of the Currency, the Federal Reserve, the FDIC, and the Office of Thrift Supervision. It subjects nonbank affiliates of bank holding companies that engage in lending or offering banking products or services to CRA; requires a reduction in rating for predatory and discriminatory lending, and states that securities companies, mortgage banks, and insurance companies have a continuing affirmative obligation to meet the financial services needs in their assessment areas, including those of low- and moderate-income neighborhoods and persons of modest means.
NAFCU's Thaler said he had been to Congresswoman Johnson's office when they first got wind of a bill in the works and discussed their concerns. "We met with the congresswoman's staff prior to the introduction of the bill. We had heard and were aware they were working on a CRA modernization bill," he said. It is "fair to say they agreed" that credit unions do not require CRA, he added, pointing out that they are not included in the bill.
Whether the bill has legs or not, "That's a tough question..." Thaler said. "Obviously it has the support of a number of Democratic members in the majority." However, he said of the two major national trade associations, "If the CRA issue comes up, I'm sure we'll work together." --firstname.lastname@example.org