ICBA Press Release Banner 2020

In House testimony, ICBA outlines recommendations for CRA modernization

Washington, D.C. (July 13, 2022) — The Independent Community Bankers of America (ICBA) today called on Congress to examine the need to apply the Community Reinvestment Act to tax-exempt credit unions. Quentin D. Leighty, CFO and president of First National Bank of Las Animas, Colo., testified that modern credit unions are no longer subject to any meaningful limits established by Congress to justify their tax exemption and use their tax subsidies to acquire taxpaying community banks.

“When a community bank is acquired by a credit union, a Community Reinvestment Act-covered institution is removed from the market with an adverse impact on low- and moderate-income communities,” Leighty told the House Financial Services Subcommittee on Consumer Protection and Financial Institutions. “ICBA and community banks urge this committee to hold a hearing in the near future to examine the community impact of credit union-community bank acquisitions and the possible application of CRA to credit unions.”

With federal banking regulators considering a proposal to update CRA regulations, Leighty shared ICBA’s modernization recommendations, including:

  • Updating CRA asset thresholds to reflect the current banking environment and allowing smaller institutions to continue to use the current CRA framework.
  • Expanding and consistently applying CRA-qualifying activities.
  • Employing alternative approaches for minority- and women-owned financial institutions and community development financial institutions.
  • Applying CRA equitably to all financial services providers that serve consumers and small businesses, including credit unions and fintech companies.
  • Advancing the proposal’s provisions to allow institutions to receive CRA credit for qualifying activities outside their assessment areas and to maintain a public list of activities eligible for CRA consideration.

ICBA will provide detailed comments to regulators on their CRA proposal ahead of the Aug. 5 comment deadline while it continues calling on Congress to hold a hearing on the credit union tax exemption and acquisitions of taxpaying community banks.

About ICBA
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.

With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding nearly $5.9 trillion in assets, over $4.9 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.