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LATHAM, N. Y. – The New York Credit Union League has alerted all credit unions in the state to a proposal that would add them to the state’s CRA regulations. According to Mike Lanotte, general counsel for the league, a state legislator introduced the proposal late Friday (Feb. 3), catching the league off guard. The legislative justification part of the proposal indicated that the bill’s primary sponsor was motivated and informed solely by the July 2005 report from the National Community Reinvestment Coalition. That report alleged that credit unions were not serving lower income communities based on data generated under the Home Mortgage Disclosure Act. Lanotte said the league objected to the proposal for a number of reasons but particularly because it was based solely on HMDA data. “For example, many of our credit unions’ work in low-income communities involves offering them basic banking and financial education,” Lanotte pointed out. “A study based on HMDA data is not going to reflect that.” Lanotte also reported that that since the proposal does not differentiate between federal and state charters, it may be preempted for federally chartered CUs should it become law. If it is preempted it may thus disadvantage state chartered credit unions, but Bonnie Sklar, spokesman for the league, stressed that those kinds of questions remained far in the future. “The bill only has supporters on one side of the aisle,” she pointed out. Bill Myers, CEO of the $49 million Alternatives Credit Union, headquartered in Ithaca, New York, is well connected with the New York community development community where such a bill could have been expected to come from. He said that although many of the community development groups and professionals cooperate in efforts against such things as payday lending, no one he had talked to had known anything about this bill. A call to the office of the bill’s chief sponsor, assemblyman Pete Rivera, was not returned as of press time.

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