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Samantha: Hello, this is Samantha Shares.

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This episode covers The Defense
Credit Union Council’s letter to N C

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U A’s Chairman Todd Harper regarding
his support for imposing Community

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Reinvestment Act on credit unions.

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The following is an audio
version of that letter.

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This podcast is educational
and is not legal advice.

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We are sponsored by Credit Union
Exam Solutions Incorporated, whose

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Forty years of National Credit

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Union  Administration experience.

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We assist our clients with N C
U A so they save time and money.

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If you are worried about a recent,
upcoming or in process N C U A

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examination, reach out to learn how they
can assist at Mark Treichel DOT COM.

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Also check out our other podcast called
With Flying Colors where we provide tips

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on how to achieve success with N C U A.

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And now the letter.

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October 15, 2024 Chairman Todd  Harper

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National Credit Union Administration

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Dear Chairman Harper,

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Our members noted your recent social media
posts and comments indicating support

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for imposing Community Reinvestment
Act (C R A) provisions on credit unions

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and soliciting input on the issue.

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On behalf of the Defense Credit Union
Council (D C U C) and our nearly 200

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members and 40 million members of
defense credit unions, as well as

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the entire credit union movement,
we are writing to express our deep

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concerns regarding the potential
application of C R A to credit unions.

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This decision should not be made in haste
or in response to news stories about

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the actions of one or two credit unions.

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It would be a public policy failure
to universalize the recent “redlining”

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violation of one particular credit union
and apply remedies for that misdeed

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into a regulatory burden that is wholly
inappropriate for the member-owned

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cooperative credit union industry.

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Additionally, the fact that the
“redlining” finding by the Department

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of Justice was uncovered without C R
A being applicable to credit unions

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strongly suggests that this remedy
would not address whatever problem you

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assert should lead to C R A for part
or all of the credit union movement.

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Our members take their mission seriously
as not-for-profit, member-owned

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cooperatives with a distinct
mission to serve their members,

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especially those of modest means.

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This cooperative structure has always
served to ensure that credit unions

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are inherently focused on meeting
the financial needs of their members,

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unlike for-profit banks, which have
external shareholders to satisfy.

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Credit unions already serve low-
and moderate-income individuals

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and communities without the need
for additional regulatory mandates.

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Imposing expensive C R A requirements
on credit unions is redundant and

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unnecessary and eliminate the number of
credit unions currently serving their

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members’ best interests along with those
who are economically disadvantaged.

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Data consistently shows that credit
unions, including Defense Credit

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Unions, have an exemplary record
of providing affordable financial

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services to underserved populations.

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Many credit unions, particularly those
serving military bases and defense

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personnel, operate in areas where banking
options are limited, and the financial

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needs of service members are distinct.

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By offering low-cost loans,
financial literacy programs, and

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savings products, credit unions
fulfill their mission of promoting

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financial inclusion and security.

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Since the C R A was enacted to
address the issue of discriminatory

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lending practices (i.e., “redlining”)
by for-profit, shareholder-driven

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banks, why punish all credit unions?

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Credit unions, by definition, do
not engage in the practices that

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C R A was designed to combat.

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The fundamental difference in structure
and purpose between banks and credit

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unions makes C R A an ill-fitting
regulatory framework on the latter.

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Plus, credit unions are already
held accountable to their members,

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ensuring that their activities
benefit the communities they serve.

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Finally, the N C U A, as the independent
regulator of federally insured

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credit unions, has a critical role in
protecting and promoting the unique

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cooperative model of credit unions.

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We commend the N C U A for consistently
opposing the application of C R

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A to credit unions and urge the
agency to continue to advocate

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against any such proposals.

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Particularly since credit unions are
already subject to extensive regulatory

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oversight and examination by the N C U A.

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We strongly urge the National Credit
Union Administration (N C U A) to continue

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its long- standing opposition to such
requirements and request a meeting

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with your office and our member CEOs to
discuss this issue in greater detail.

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Chairman Harper, we have a shared
interest in protecting and empowering

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consumers, and we look forward to working
constructively with you and your team

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to arrive at workable solutions that
improve member access and service.

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Thank you for your attention to this
matter and for protecting the unique role

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that credit unions play in the financial
services landscape, particularly for our

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nation’s defense and military communities.

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Sincerely,

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Jason Stverak

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Chief Advocacy Officer D C U C

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This concludes the Letter

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If your Credit union could use assistance
with your exam, reach out to Mark Treichel

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on LinkedIn, or at mark Treichel dot com.

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This is Samantha Shares and
we Thank you for listening.