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Credit Unions Oppose MD Bill on Community Benefit Plan Act of 2024

HB 1183 was introduced by Del. Melissa Wells (Baltimore, District 40) last week and would require Maryland-chartered credit unions and banks to create Community Benefit Plans. The Association and credit unions are strongly opposed to this legislation. The Community Benefit Plans would outline goals for providing financial services to low- and moderate-income individuals and distressed communities, with the Maryland Commissioner of Financial Regulation having oversight and enforcement authority.

Under the proposed legislation:

  • State-chartered credit unions and banks would have to submit a 3-year Community Benefits Plan to the Commissioner of Financial Regulation.
  • The plan would be open for a 60-day public comment period and would be revised based on public comments received.
  • A committee would be established to review the Community Benefits Plan made up of representatives from the following groups: community-based organizations, faith community, civil rights organizations, public officials from urban and rural jurisdictions and other stakeholders that represent diversity and community development.
  • The Commissioner would be required to make a report available to the public showing if the financial institutions are meeting the plan and allow for a public comment period.
  • Penalties would be imposed for failure to meet the requirements of the Community Benefits Plan including denial of applications, civil penalties or branch divestiture.
  • A special Community Reinvestment Fund would be established to finance community development activities, with revenue coming from penalties and fees assessed under the Act.

A similar bill, proposed during the 2023 legislative session, focused on applying the Community Reinvestment Act to state-chartered credit unions and banks. It was withdrawn prior to the first committee hearing.

The Association’s Advocacy Team is actively opposing HB 1135 and will keep our affiliates updated on the latest developments. The House Economic Matters Committee has scheduled a hearing for February 27.

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