The Honorable Maxine Waters
Chairwoman
Committee on Financial Services
United States House of Representatives
Washington, D.C. 20515
The Honorable Patrick McHenry
Ranking Member
Committee on Financial Services
United States House of Representatives
Washington, D.C. 20515
Dear Chairwoman Waters and Ranking Member McHenry:
We write to oppose the tax-exempt credit union industry’s latest attempt at charter enhancement, the “Expanding Financial Access for Underserved Communities Act,” discussed at the July 21st committee hearing.
We share your interest in expanding financial access for the underserved and have previously outlined our support for important initiatives such as Bank On-certified accounts, which have produced real results in reducing the number of unbanked in the country. We cannot support this proposal, however, because growth-oriented credit unions with already expansive fields of membership have failed to demonstrate a commitment to serve the underserved despite a congressional mandate and federal tax exemption to do so. Instead, we view this proposal as yet another backdoor effort by the credit union industry to expand its membership rolls at the expense of tax-paying banks.
As credit union acquisitions of banks continue at an increasing pace, with more than 50 transactions announced since 2013 (and five acquisitions announced so far during August recess), the marketplace is demonstrating that credit unions have ample opportunity to serve additional communities under their existing authority. While credit unions, which are not subject to the same strict data reporting as banks, regularly tout their commitment to serving low- and moderate-income (LMI) communities, they have not stepped up to prove this service—and in fact evidence points to the contrary.
Rather than expand credit union authority, Congress should hold these institutions accountable through bank-equivalent CRA requirements that would require demonstrable data of the extent to which they currently serve people of modest means.
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