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WASHINGTON-In a letter to members of the House, the Independent Community Bankers of America wrote that the Expanded Access to Financial Services Act (H.R. 749) raised the need to bring credit unions under the Community Reinvestment Act. The measure, which permits credit unions to offer remittance and check cashing services to anyone within their field of membership, passed the House April 26 by a voice vote. “The Community Reinvestment Act (CRA) requires banks and thrifts to reach out to all segments of their markets to serve poor and minority populations,” ICBA’s letter read. “For community banks, this is a matter of good business and good citizenship. If community banks did not serve their entire communities, they would not long survive. “Tax-exempt credit unions are not subject to CRA or any similar requirement. Federal credit unions were chartered by Congress to serve people of “modest means,” and their exemption from state and Federal income taxes is due in large measure to this social purpose (in addition to serving people within a well-defined “field of membership”). Despite this congressional mandate, studies suggest that credit unions are not fully meeting their statutory requirement to serve people of modest means. And there is no CRA-equivalent for the credit union industry to monitor it.” The letter cited NCUA’s repeal of the Community Action Plan in 2001, which would have required community credit unions to show how they intended to serve the entire community, and a 2003 Government Accountability Office study based on 2001 Home Mortgage Disclosure Act data that found credit unions made a lower proportion of mortgage loans to households with low- and moderate-incomes than peer group community banks and serve a higher-income population than banks. ICBA also noted a recent Tax Foundation study, funded by ICBA, that said credit unions’ tax exemption is no longer justified. “We believe this is compelling and overwhelming evidence that, despite the tax-exempt credit union industry’s desire to expand their powers through such bills as H.R. 749, they are not in fact fulfilling even the most fundamental requirements of their statute,” the letter read. “There is no longer any reason to exclude tax-exempt credit unions from a requirement to reinvest in their communities, especially since based on these studies, it may be the only way to assure that “people of modest means” have access to credit union services. “Congress should consider applying CRA to tax-exempt credit unions in the same manner, and with the same asset size distinctions, as banks and thrifts. If tax-exempt credit unions truly have a interest in serving the needs of the under banked, then they should have no difficulty in supporting such an initiative.” -

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