WASHINGTON — Following Congressman Jos?(C) Serrano's (D-N.Y.)introduction of legislation to allow federal credit unions of allcharter types to adopt underserved areas, America's CommunityBankers wrote the lawmaker that his legislation wasunnecessary.

“We applaud your longstanding efforts to help provide basicfinancial services to those who have not had access the U.S.financial system,” ACB Vice President of Government Relations GregMesack wrote. “ACB shares your goal. Unfortunately we do notbelieve that the provisions in H.R. 3113 are the correct approach.Rather, your legislation will merely make it easier for taxsubsidized credit unions to expand beyond their current charterareas and compete with tax paying community banks.”

Serrano's bill, the Affordable Financial Services EnhancementAct (H.R. 3113), says it aims “to clarify congressional intent withrespect to the provision of affordable financial services by alltypes of Federal credit unions in underserved areas, and for otherpurposes.”

ACB charges that “there is a rapidly growing body of evidence”that credit unions use their tax-exemption to serve the wealthy andthat community credit unions wishing to serve low-income householdscan already, noting that Hospitality Community Credit Union hasbeen approved by NCUA to serve all of Washington, D.C.

“ACB believes that these credit unions, which are able to reachout to many underserved people already, should prove that they aredoing so before asking to expand to new areas. The fact that thesecredit unions currently have the ability to serve their entirecommunities, and a tax subsidy so that they can reach out to lowincome Americans but do not, demonstrates that your legislation,though well intentioned, is unnecessary,” Mesack concluded.