Two representatives of predominately minority districts in the House have announced plans to introduce legislation that would impose Community Reinvestment Act mandates on insurance companies.
Jack Dolan, a spokesman for the American Council of Life Insurers, noted that no bill has been introduced on the topic as yet. However, he added that the ACLI believes the CRA does not work for the life insurance industry because insurance companies are not chartered to serve particular geographic areas.
“Our customers tend to represent the entire nation,” Dolan said. “In addition, there is no evidence that life insurers discriminate in providing protection and retirement security products, thus obviating the need for the imposition of CRA or similar requirements.”
Disclosure of plans to introduce the bill in the House came from a Dear Colleague letter obtained by National Underwriter that Democratic Reps. Eddie Bernice Johnson, Texas, and Luis Gutierrez, Illinois, sent to other members of the House.
In asking other members of the House to become co-sponsors of the “Community Reinvestment Modernization Act of 2007,” the 2 representatives said CRA mandates, currently confined to banks and thrifts, “remain an effective fair-lending tool in today’s rapidly changing financial services marketplace.”
But, they added, they believe that “despite the progress, minorities, women, and low- and moderate-income borrowers continue to receive a disproportionate amount of higher cost subprime loans.”
One purpose of the bill, they continued, would be to extend CRA mandates to “all affiliates of financial holding companies authorized by the Gramm-Leach-Bliley Act of 1999″–i.e., mortgage companies, insurance companies and securities firms.