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This podcast provides you the ability to listen to new regulatory guidance issued by the National Credit Union Administration, and occasionally the F D I C, the O C C, the F F I E C, or the C F P B. We will focus on new and material agency guidance, and historically important and still active guidance from past years that NCUA cites in examinations or conversations. This podcast is educational only and is not legal advice. We are sponsored by Credit Union Exam Solutions Incorporated. We also have another podcast called With Flying Colors where we provide tips for achieving success with the N C U A examination process and discuss hot topics that impact your credit union.
Samantha: Hello, this is Samantha Shares.
This episode covers The Defense
Credit Union Councilâs letter to N C
U Aâs Chairman Todd Harper regarding
his support for imposing Community
Reinvestment Act on credit unions.
The following is an audio
version of that letter.
This podcast is educational
and is not legal advice.
We are sponsored by Credit Union
Exam Solutions Incorporated, whose
team has over two hundred and
Forty years of National Credit
Union Administration experience.
We assist our clients with N C
U A so they save time and money.
If you are worried about a recent,
upcoming or in process N C U A
examination, reach out to learn how they
can assist at Mark Treichel DOT COM.
Also check out our other podcast called
With Flying Colors where we provide tips
on how to achieve success with N C U A.
And now the letter.
October 15, 2024 Chairman Todd Harper
National Credit Union Administration
Dear Chairman Harper,
Our members noted your recent social media
posts and comments indicating support
for imposing Community Reinvestment
Act (C R A) provisions on credit unions
and soliciting input on the issue.
On behalf of the Defense Credit Union
Council (D C U C) and our nearly 200
members and 40 million members of
defense credit unions, as well as
the entire credit union movement,
we are writing to express our deep
concerns regarding the potential
application of C R A to credit unions.
This decision should not be made in haste
or in response to news stories about
the actions of one or two credit unions.
It would be a public policy failure
to universalize the recent âredliningâ
violation of one particular credit union
and apply remedies for that misdeed
into a regulatory burden that is wholly
inappropriate for the member-owned
cooperative credit union industry.
Additionally, the fact that the
âredliningâ finding by the Department
of Justice was uncovered without C R
A being applicable to credit unions
strongly suggests that this remedy
would not address whatever problem you
assert should lead to C R A for part
or all of the credit union movement.
Our members take their mission seriously
as not-for-profit, member-owned
cooperatives with a distinct
mission to serve their members,
especially those of modest means.
This cooperative structure has always
served to ensure that credit unions
are inherently focused on meeting
the financial needs of their members,
unlike for-profit banks, which have
external shareholders to satisfy.
Credit unions already serve low-
and moderate-income individuals
and communities without the need
for additional regulatory mandates.
Imposing expensive C R A requirements
on credit unions is redundant and
unnecessary and eliminate the number of
credit unions currently serving their
membersâ best interests along with those
who are economically disadvantaged.
Data consistently shows that credit
unions, including Defense Credit
Unions, have an exemplary record
of providing affordable financial
services to underserved populations.
Many credit unions, particularly those
serving military bases and defense
personnel, operate in areas where banking
options are limited, and the financial
needs of service members are distinct.
By offering low-cost loans,
financial literacy programs, and
savings products, credit unions
fulfill their mission of promoting
financial inclusion and security.
Since the C R A was enacted to
address the issue of discriminatory
lending practices (i.e., âredliningâ)
by for-profit, shareholder-driven
banks, why punish all credit unions?
Credit unions, by definition, do
not engage in the practices that
C R A was designed to combat.
The fundamental difference in structure
and purpose between banks and credit
unions makes C R A an ill-fitting
regulatory framework on the latter.
Plus, credit unions are already
held accountable to their members,
ensuring that their activities
benefit the communities they serve.
Finally, the N C U A, as the independent
regulator of federally insured
credit unions, has a critical role in
protecting and promoting the unique
cooperative model of credit unions.
We commend the N C U A for consistently
opposing the application of C R
A to credit unions and urge the
agency to continue to advocate
against any such proposals.
Particularly since credit unions are
already subject to extensive regulatory
oversight and examination by the N C U A.
We strongly urge the National Credit
Union Administration (N C U A) to continue
its long- standing opposition to such
requirements and request a meeting
with your office and our member CEOs to
discuss this issue in greater detail.
Chairman Harper, we have a shared
interest in protecting and empowering
consumers, and we look forward to working
constructively with you and your team
to arrive at workable solutions that
improve member access and service.
Thank you for your attention to this
matter and for protecting the unique role
that credit unions play in the financial
services landscape, particularly for our
nationâs defense and military communities.
Sincerely,
Jason Stverak
Chief Advocacy Officer D C U C
This concludes the Letter
If your Credit union could use assistance
with your exam, reach out to Mark Treichel
on LinkedIn, or at mark Treichel dot com.
This is Samantha Shares and
we Thank you for listening.