SACRAMENTO, Calif. — Credit unions in California have avoided a proposed state Community Reinvestment Act-style mandate after lawmakers substantially amended legislation that the industry warned could have imposed annual compliance costs ranging from $50,000 to more than $1 million per institution, according to California’s Credit Unions.
Assembly Bill 801 initially proposed imposing a CRA-style requirement on California’s state-chartered credit unions. California’s Credit Unions opposed the measure, arguing it would create significant new regulatory and compliance costs.
The trade group said amendments adopted Friday effectively eliminated the original CRA-style mandate, although it remains opposed to the legislation.
Under the amended bill, its scope would be narrowed to fair lending and mortgage lending activities, with reviews incorporated into existing examinations, according to California’s Credit Unions. The changes also would give the state commissioner discretion to waive examinations and would exempt smaller institutions.
‘Advocacy in Action’
“This is direct advocacy in action, and it benefits both state and federally chartered credit unions,” Jeremy Empol, president and CEO of California’s Credit Unions, said in a statement. “By defending the dual-charter system, preventing harmful precedents, and stopping costly mandates from spreading, the League fights for every California credit union.”
The trade group said it viewed the amendments as an important advocacy victory because of the potential costs associated with the original proposal and the precedent a state CRA-style requirement could have established.
Estimated Costs
California’s Credit Unions estimated potential annual compliance costs using Office of the Comptroller of the Currency scales for bank compliance. The group estimated:
- Credit unions with less than $300 million in assets could have faced annual costs of $50,000 to $150,000.
- Credit unions with assets between $300 million and $999 million could have faced costs of $150,000 to $500,000 annually.
- Credit unions with more than $1 billion in assets could have faced annual costs of $500,000 to $2 million or more.
The trade group said it expects CRA-style proposals to return and is urging credit unions to continue documenting and demonstrating their impact in the communities they serve.
California’s Credit Unions said its Advancing Communities Together, or ACT, initiative is intended to develop a stronger and more unified narrative about credit unions’ community impact.
Focus on a Separate Fight
The organization said it also continues to focus on resolving a separate fight involving the taxation of software-as-a-service, or SaaS, which remains a top legislative priority. The group said it is seeking a solution that protects California credit unions and the state’s dual-charter system.
“This victory demonstrates the value of collective action: direct advocacy, the power of the movement, and sustained engagement producing tangible results,” Empol said. “We thank our credit union members for their continued membership and partnership.”
