Credit unions would have to comply with the provisions of the Community Reinvestment Act under a bill that Rep. Eddie Bernice Johnson (D-Texas) plans to introduce later this week.
In the bill, credit unions would be included with independent mortgage companies, mortgage company affiliates of banks, insurance companies and securities firms as part of a group of "non-bank institutions," to which the act applies.
The bill would expand CRA to require CRA exams consider how well a financial institution serves minorities as well as how well it serves low- and moderate-income groups. It would also require small business loan data to include information on the race and gender of the small business owner.
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Johnson plans to unveil the legislation on Thursday, according to a memorandum obtained by Credit Union Times. Her spokeswoman did not immediately return a phone call seeking comment.
CRA was passed by Congress in 1977 in response to incidents in which banks were found to have discriminated in loan decisions against certain communities based on their racial composition. Credit unions have not been covered by CRA and have worked hard to show that they have been responsive to the needs of underserved areas.
The NCUA created an Outreach Task Force which recommended several ideas for improving credit unions' performances in this area.
Last May, the board approved a rules change to collect additional data from credit unions to refute criticism about credit unions' record. The agency upload credit union membership data during regular examinations use geo-coding software to generate a membership income profile. The software will determine the census tract for each member account, extract median family income information from the U.S. Census Bureau, and create individual FCU membership profiles.
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