Democrats Call for Stronger CRA, But Don’t Push Expanding It to CUs

Congressional Democrats and the House Financial Services Committee want a strengthened CRA, but neither is pushing for credit union inclusion. Learn why.

David Baumann


Aug 15



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David Baumann

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David Baumann

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Credit union inclusion in CRA not sought by either congressional Democrats or House Financial Services Committee.

Congressional Democrats are calling for federal banking regulators to stiffen rules governing the Community Reinvestment Act (CRA), but they are not pushing for the legislative changes that would make credit unions subject to the law.

Some 19 Democratic senators and more than 75 House Democrats signed letters saying that the OCC, the FDIC and the Federal Reserve should do more to push banks to invest in their communities.


Enacted in 1977, the CRA requires banking regulators to conduct tests to measure how well banks are meeting the needs of their communities—including low- and moderate-income (LMI) communities. Regulators issued updated rules for the CRA in May.

In commenting on these rules, the American Bankers Association, its state affiliates and the Independent Community Bankers Association have called on Congress to expand the CRA to include banks.

In the past, some Democratic lawmakers, including Sen. Elizabeth Warren, D-Mass., and other Democrats have likewise pushed that idea.

Different Priorities

But this year, congressional Democrats had other things on their minds.

In their comment letter, Senate Banking Committee Chairman Sen. Sherrod Brown, D-Ohio, Warren and 17 of their colleagues said the proposed rule does little to strengthen oversight of banks’ work with communities of color that have been excluded from traditional financial services.

They noted, however, that they support the regulators’ proposed expansion of the activities that are eligible for community development credit, including work with low-income credit unions and CDFIs.

House Committee Stance

On the other side of Capitol Hill, House Financial Services Committee Chairwoman Rep. Maxine Waters, D-Calif., and more than 75 of her colleagues also called for stronger CRA regulations.

“We applaud your agencies’ joint efforts to strengthen CRA rules, but in order to truly end modern-day redlining, we urge your agencies to closely consider comments provided to you by consumer, civil rights, and other community groups, as well as MDIs and CDFIs, as you finalize the rulemaking,” their letter stated.

They added that the regulators should include assistance to communities of color in their CRA tests, writing, “After all, the CRA’s statutory purpose and history is to address both ‘persistent systemic inequity in the financial system for LMI and minority individuals and communities.’”

However, they said nothing about expanding the CRA to include credit unions.

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