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NAFCU voices support for FOM and CDFI language, concerns about burdens included in DEI package
NAFCU Vice President of Legislative Affairs Brad Thaler Tuesday wrote to the House to share thoughts about the Financial Services Racial Equity, Inclusion, and Economic Justice Act package, which includes the Expanding Financial Access for Underserved Communities Act. In the letter, Thaler detailed which portions of the package NAFCU supported in addition to several provisions he suggests lawmakers revisit.
Thaler reiterated the association's support for the Expanding Financial Access for Underserved Communities Act, which would allow all types of federal credit unions to add underserved areas to their field of membership and adds "banking deserts," areas not within 10 miles of a branch of a financial institution, to the definition of an underserved area. In addition, Thaler offered support for legislation to permanently authorize the CDFI Bond Guarantee Program, the CDFI Bond Guarantee Program Improvement Act, which is also included in the package along with some other CDFI reforms aimed at aiding financial institutions.
However, Thaler also noted several concerns regarding a number of provisions included in the DEI package that increase data reporting and disclosure requirement burdens on credit unions.
"While they may be well-intentioned, we must caution against the burden they stand to place on community financial institutions," wrote Thaler. "We believe that these provisions may prove counterproductive to the goal of increasing access to capital as institutions spend resources to comply, rather than use them to aid members."
In addition to noting concerns about provisions that would expand the authority of the CFPB, Thaler additionally called on lawmakers to update a current provision in the package that updates the definition of minority depository institutions (MDIs) to include women’s banks. While the association supports efforts to help MDIs, NAFCU believes that if the definition of MDI is updated for banks, it should also be updated for credit unions as the legislation works it’s way through the process.
The House is scheduled to consider the package on the House floor today. NAFCU will continue to monitor movement on the package and will remain in contact with Congress to ensure credit unions' voices are heard.