American Banker reports that House Democrats in the nation's capitol are seeking to impose tougher CRA standards on banks via legislation introduced late in the current session. Credit unions should be watchful. Although House Finance Committee chair Barney Frank pledged to keep credit unions out of any CRA efforts a few weeks ago, anything can happen in the legislative process.
The bill by Rep. Luis Gutierrez would make it tougher for banks to receive an "outstanding" rating on their CRA exams, add a new "sufficient" rating and require bank affiliates and subsidiaries to be included in evaluations.The bill would extend CRA requirements to independent mortgage companies, investment banks and hedge funds with the Consumer Financial Protection Bureau tasked with promulgating rules to enforce the standards for mortgage brokers and originators and the Securities and Exchange Commission promulgating regulations to cover investment banks, securities firms and hedge funds. CRA would also be extended to insurance companies. It does not currently propose to extend CRA to credit unions, which banks have sought for years.
The bill's introduction comes late in the congressional year and although it could move through the Financial Services Committee and even the House after the elections in a lame-duck session of Congress, it faces long odds in the Senate, which has no plans to take up the matter this year. Its prospects for a legislative victory are further dwarfed by expectations Republicans will pick up considerable seats in the elections and possibly take control of the House next year
Read the American Banker article in entirety - House Democrats Launch Bill for Tougher CRA Standards
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