Today, the Defense Credit Union Council, DCUC, sent a letter to the National Credit Union Administration, NCUA, Chairman Todd Harper, expressing its concerns over the potential application of Community Reinvestment Act (CRA) provisions to credit unions.

The letter was prompted by recent social media comments made by Chairman Harper indicating his openness to exploring CRA applicability to credit unions. DCUC strongly believes applying CRA to credit unions is both unnecessary and inappropriate, given the unique structure and mission of 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," stated Jason Stverak, DCUC Chief Advocacy Officer. “Additionally, the fact that the “redlining” finding by the Department of Justice was uncovered without CRA being applicable to credit unions strongly suggests that this remedy would not address whatever problem you assert should lead to CRA for part or all of the credit union movement.”

DCUC highlighted that the existing regulatory framework already holds credit unions accountable for discriminatory practices and emphasized that imposing CRA would add redundant and costly regulatory burdens to credit unions.

“Since the CRA 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 CRA was designed to combat,” added Stverak. “The fundamental difference in structure and purpose between banks and credit unions makes CRA 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.”

The letter further underscores the exemplary track record of credit unions, particularly defense credit unions, in providing affordable financial services to underserved populations, including military communities.

“By offering low-cost loans, financial literacy programs, and savings products, credit unions fulfill their mission of promoting financial inclusion and security. Applying CRA to credit unions would punish them for problems that don’t exist within their cooperative model.”

DCUC urges the NCUA to continue its long-standing opposition to applying CRA to credit unions, citing the current extensive regulatory oversight credit unions are already subject to. Stverak requested a meeting with Chairman Harper, Vice Chairman Kyle Hauptman, and Board Member Tanya Otsuka to discuss the issue further and explore constructive solutions to enhance member access and services.

"We look forward to working with Chairman Harper and the NCUA to protect and strengthen the role credit unions play in serving military and defense communities," said Anthony Hernandez, DCUC President/CEO.

For more information on DCUC’s advocacy, please visit dcuc.org/advocacy and contact Jason Stverak, DCUC Chief Advocacy Officer at jstverak@dcuc.org.