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NAFCU supports inclusion of NAFCU-backed Expanding Financial Access for Underserved Communities Act in DEI package
NAFCU Senior Vice President of Government Affairs Greg Mesack wrote to the House Rules Committee Friday regarding its hearing and markup today that discusses a legislative package on diversity, equity and inclusion (DEI), the Financial Services Racial Equity, Inclusion, and Economic Justice Act. Of note, the Act currently includes the NAFCU-backed Expanding Financial Access for Underserved Communities Act, which allows all types of federal credit unions to add underserved areas to their field of membership. In addition, the bill adds "banking deserts," areas not within 10 miles of a branch of a financial institution, to the definition of an underserved area. However, an amendment was filed for the Rules markup by Representative Andy Barr, R-KY., that would strike that provision from the bill.
In the letter, Mesack recommends two actions for the Committee:
First, he urges that the Committee support an amendment filed by Rep. Ritchie Torres, D -N.Y., which would “expand the definition of Community Financial Institutions (CFIs) in the Federal Home Loan Bank (FHLB) Act to credit unions and Treasury-certified non-depository community development financial institutions.” Of note, this status would enable credit unions to pledge small business, small agriculture, and community development loans, not just housing loans as collateral with the FHLBs.
Second, Mesack strongly urges the Committee to oppose any amendment that would strike the Expanding Access for Underserved Communities Act from the package. In addition, he refutes the criticism received from the banking industry on excluding this bill in the package.
“The Expanding Access for Underserved Communities Act would make more credit unions eligible to offer basic banking services to areas that are underserved or banking deserts,” wrote Mesack. He also pushed back on banker opposition to the provision, noting that “It is the height of cynicism that the banking trade associations … are essentially saying that even though their members have left these communities, they do not want credit unions to step in to fill the void as banks pull out. It seems that they would rather underserved communities have no financial institutions than have a credit union serve them.”
Read the full letter. NAFCU will monitor the hearing and will continue to heavily advocate for the inclusion of the Expanding Financial Access for Underserved Communities Act in this package.