As you can imagine from the title, I am not a fan. And though it is merely a bill at this point, I am still not a fan of it. CRA definetely needs to be fixed (it is most definetely broken), but I don’t think CDCU’s should even be on the target list. I mean, Community Development Credit unions by the nature of what they do, already provide access to capital in underserved communities–both rural and urban in way that CRA in its current structure does not (don’t get me started on the fact that financial institutions with CRA needs seem hell bent on anything in Cali or New York–which I don’t think was the intent.)
Read the Federation’s (formerly the Federation of Community Development Credit Unions) response to the act here. And the NCRC’s favorable view of it here. What say you, you CRA experts?
1 response so far ↓
Phyllis Rosenblum // April 7, 2009 at 2:54 pm |
As an old (literally and figurately) CRA person, with 25 years of experience, I agree with Cliff and with Kris that there is little sense and, in my view, little to be gained from expanding CRA to CDCU credit unions. I am of the opinion that CRA should continue to be limited to deposit taking banks, though I can see the expansion to large credit unions that are open to non-members.
On the issue of CRA reform, I do not agree with much that is in the NCRC platform. CRA is not about race, it is about income and geography and that should remain the focus as we have not yet solved the problems that led to CRA in the first instance.
I agree that there should be an expansion of HMDA to include the institutions mentioned–there is a lot to be gained from that. In fact, I believe the requirements to add pricing data should be included should now be mandatory and the requirements should include the credit score of the borrower so one can see any predatory practices.
CRA is a flexible regulation and it has changed over the years to reflect whatever the current issues are. We shouldn’t lose sight of that–by trying to pin down every little piece of data. The data collection had become onerous and expensive, giving management much to complain about.
Advocates are the key to CRA enforcement. If groups care about it, the government and regulators follow. Right now, banking services are a big concern and these days mortgage lending is much less of a concern (availability, that is).
I would love to see the people who are trying to reform CRA by expanding it to insurance companies, credit unions, etc. get more in touch with what CRA has already accomplished and what more needs to be done. Expansion will not get us there in our lifetimes.
Lastly, there are very important consumer issues that are not yet on the advocate agenda, at least that I have seen. Credit card abuse is one of them. Everyone who cares about lower income people should be watching cards, fees, minimums, check cashing/payday lending. The predators remain out there.
Thanks for listening.