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As regulators review the requirements of the Community Reinvestment Act (CRA) and bank lobbyists continuing spreading misinformation regarding the law, NAFCU President and CEO Dan Berger recently reiterated why this law applies to banks and provided valid reasoning – already acknowledged by Congress and regulators – as to why it does not apply to credit unions.

In a letter to House Financial Services Committee leaders, Berger noted that the CRA was adopted as a punitive measure on banks due to discriminatory practices such as redlining and disinvestment. "Given the behaviors of many banks that led to the 2008 financial crisis, and even the recent scandals such as those at Wells Fargo, it is apparent that banks have not learned their lesson and that is why we believe that the CRA still has a role to play for banks today," he wrote.

Furthermore, Berger encouraged the lawmakers to take a second look at reinstating a modernized Glass-Steagall Act and regulators' attempts to loosen Volcker rule requirements on big banks. According to new data released by the FDIC last week, federally insured banks and savings institutions reported third-quarter profits of $62 billion.

Noting why credit unions are not under the CRA requirements – a position understood and affirmed by the Treasury Department and lawmakers – Berger explained that credit unions have not engaged in the illegal and discriminatory practices of banks. Also, "credit unions are inherently invested in their communities, operating unlike other depository institutions with a not-for-profit cooperative structure and a common bond membership."

Berger's letter and follow-up remarks came after the American Bankers Association, in a recent comment letter to the Office of the Comptroller of the Currency (OCC), called for credit unions to be subject to the CRA as the regulator takes another look at the law.

NAFCU has been at the forefront, defending credit unions against bank lobbyists efforts at every turn. In a Credit Union Times op-ed, Berger lays out additional arguments regarding CRA and points to the fact that credit unions are prepared to help more underserved. NAFCU's advocacy team had introduced a bipartisan bill by Reps. Gwen Moore, D-Wis., and Paul Cook, R-Calif., that would allow all credit unions to add underserved areas to their respective fields of membership. In recent testimony before the Senate Banking Committee, NCUA Chairman J. Mark McWatters openly supported this policy.