Saying that expanding the Community Reinvestment Act to include credit unions will expand housing opportunities, Rep. Eddie Bernice Johnson (D-Texas) today introduced a bill that would do that.
Johnson said at a Capitol Hill news conference that she is including credit unions in her bill, the CRA Modernization Act of 2009, even though credit unions have for the most part behaved responsibly and "we haven't heard many complaints about credit unions."
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.
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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.
Johnson said that many of the subprime loans that triggered the crisis were caused by mortgage companies who would now be covered by CRA.
She added that House Financial Services Committee Chairman Barney Frank has "encouraged me to go forth with this bill" but did not predict how quickly the bill would move through the House. She promised to announce sponsors in the Senate at a later time.
Though Johnson praised credit unions, John Taylor, the president/CEO of the National Community Reinvestment Coalition criticized the record of some credit unions. "It's not that they [credit unions] are bad. It's that they are not present enough in underserved areas, especially some of the larger ones."
NCUA, CUNA and NAFCU all have said they oppose having the CRA apply to credit unions. CUNA and NAFCU have long maintained that credit unions already do extensive work in underserved areas.
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