McLean Provides Testimony During Illinois CRA Public Meeting
Cooperative Credit Union Association President/CEO Ron McLean provided both oral and written testimony yesterday before the Illinois Department of Financial and Professional Regulation (“IDFPR”) relative to the newly enacted Illinois Community Reinvestment Act (“CRA”). Last March, Illinois CRA was signed into law and imposes continuing and affirmative community investment obligations on credit unions and other covered state institutions. In preparation for the public meeting, the following three Association members, as longtime practitioners of CRA, also met with Illinois League staff to brief them on the challenges of CRA compliance and to provide practical insights for change: Align Credit Union, Boston Firefighters Credit Union, and Jeanne D’Arc Credit Union.
During his testimony, President McLean encouraged the IDFPR to consider the Massachusetts CRA model in its upcoming rulemaking process and emphasized the following points:
- The Massachusetts Experience Extending CRA to Credit Unions is a Time Tested and Appropriate Regulatory Model; and
- A “High Satisfactory” CRA Public Performance Rating Should be Included for Credit Unions.
He further noted that it is fundamental that extending CRA to credit unions is not as simple as just cutting and pasting bank regulations and applying them to credit unions. The Massachusetts Division of Banks’ extensive experience in supervising credit unions and its understanding of the credit union movement has been instrumental in enabling them to craft some unique distinctions into the regulations to account for the differences between banks and credit unions. Time again, it has been proven that a “one size fits all” system of regulation is short sighted and ineffective.
The public meeting hosted by IDFPR was the first in a series of ongoing public meetings on the topic. Approximately 30 individuals from credit unions, regulators and interested stakeholders attended. Representatives from Illinois credit unions, including low-income, community development and minority depository designated credit unions, and League staff focused on a few key areas in delivering their testimony:
- Assessment areas should be tailored and defined to include the common bond of a credit union;
- Small credit unions should have additional flexibility in performance standards;
- Strategic plans should be an elective to a lending test evaluation;
- Investment test performance should be exempt but measured to improve CRA if a satisfactory record exists under the lending test;
- CRA will result in additional costs related to compliance and examinations; and
- Simplified examinations and compliance should be afforded to community development and minority depository designated credit unions.
The IDFPR is accepting comments on CRA for credit unions through December 31, 2021, after which the rulemaking process will begin.« RETURN TO ALL NEWS