Magazine article American Banker

How to Head off Coming under CRA Dominates Debate at CUNA Convention

Magazine article American Banker

How to Head off Coming under CRA Dominates Debate at CUNA Convention

Article excerpt

KANSAS CITY, Mo. -- Rep. Joseph P. Kennedy 2d didn't attend the Credit Union National Association convention here this week, but his presence was felt.

Industry officials argued Monday that unless credit unions reach out to low- and moderate-income consumers, the Massachusetts Democrat's threat to bring the industry under the Community Reinvestment Act might become reality -- with disastrous results.

"We must do something dramatic and make a dramatic impression on Congress that we're doing what we should be doing," said Ed Gallagly, president of Florida Central Credit Union. "If we fall under CRA the perception is going to be, 'Damn, credit unions have failed to do the right thing.' Then we could lose the tax-exempt status."

Mr. Gallagly said he believed the industry must m9ve in the next 18 months to head off a legislative remedy. Institutions must expand their membership fields to bring in people who need financial services and can't get them elsewhere, he said.

According to a CUNA survey, the average household income of a credit union member is $42,000, which indicates that, as a whole, the industry might be failing in its historic mission of serving "people of small means."

"We should almost feel guilty about serving people of affluence," said Armando Cavazos, president of Credit Union One, Ferndale, Mich. "If we lose our soul, the rest will be taken away little by little."

A CUNA task force on the issue, which included Mr. Gallagly and Mr. Cavazos, presented its . …

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