WASHINGTON — Following Congressman Jos?(C) Serrano's (D-N.Y.) introduction of legislation to allow federal credit unions of all charter types to adopt underserved areas, America's Community Bankers wrote the lawmaker that his legislation was unnecessary.

“We applaud your longstanding efforts to help provide basic financial services to those who have not had access the U.S. financial system,” ACB Vice President of Government Relations Greg Mesack wrote. “ACB shares your goal. Unfortunately we do not believe that the provisions in H.R. 3113 are the correct approach. Rather, your legislation will merely make it easier for tax subsidized credit unions to expand beyond their current charter areas and compete with tax paying community banks.”

Serrano's bill, the Affordable Financial Services Enhancement Act (H.R. 3113), says it aims “to clarify congressional intent with respect to the provision of affordable financial services by all types of Federal credit unions in underserved areas, and for other purposes.”

ACB charges that “there is a rapidly growing body of evidence” that credit unions use their tax-exemption to serve the wealthy and that community credit unions wishing to serve low-income households can already, noting that Hospitality Community Credit Union has been approved by NCUA to serve all of Washington, D.C.

“ACB believes that these credit unions, which are able to reach out to many underserved people already, should prove that they are doing so before asking to expand to new areas. The fact that these credit unions currently have the ability to serve their entire communities, and a tax subsidy so that they can reach out to low income Americans but do not, demonstrates that your legislation, though well intentioned, is unnecessary,” Mesack concluded.