Credit Union Regulatory Guidance Including: NCUA, CFPB, FDIC, OCC, FFIEC

Samantha: Hello, this is Samantha Shares.

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

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

Reinvestment Act on credit unions.

The following is an audio
version of that letter.

This podcast is educational
and is not legal advice.

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And now the letter.

October 15, 2024 Chairman Todd Harper

National Credit Union Administration

Dear Chairman Harper,

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

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

and soliciting input on the issue.

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

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

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

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

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

the actions of one or two credit unions.

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

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

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

cooperative credit union industry.

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

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

strongly suggests that this remedy
would not address whatever problem you

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

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

cooperatives with a distinct
mission to serve their members,

especially those of modest means.

This cooperative structure has always
served to ensure that credit unions

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

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

Credit unions already serve low-
and moderate-income individuals

and communities without the need
for additional regulatory mandates.

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

unnecessary and eliminate the number of
credit unions currently serving their

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

Data consistently shows that credit
unions, including Defense Credit

Unions, have an exemplary record
of providing affordable financial

services to underserved populations.

Many credit unions, particularly those
serving military bases and defense

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

needs of service members are distinct.

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

savings products, credit unions
fulfill their mission of promoting

financial inclusion and security.

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

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

banks, why punish all credit unions?

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

C R A was designed to combat.

The fundamental difference in structure
and purpose between banks and credit

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

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

ensuring that their activities
benefit the communities they serve.

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

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

cooperative model of credit unions.

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

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

against any such proposals.

Particularly since credit unions are
already subject to extensive regulatory

oversight and examination by the N C U A.

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

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

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

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

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

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

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

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

nation’s defense and military communities.

Sincerely,

Jason Stverak

Chief Advocacy Officer D C U C

This concludes the Letter

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This is Samantha Shares and
we Thank you for listening.