How to Use the Community Reinvestment Act (CRA)
to Promote Housing and Economic Opportunity in Your Community
 
 


Why is the Community Reinvestment Act (CRA) important?

CRA is a federal law that imposes an affirmative obligation on banks to serve the credit needs of low- and moderate-income communities and to take steps to provide equal access to responsible financial products and services to traditionally underserved populations.  Thanks to CRA, banks have actively promoted housing and economic opportunity for underserved groups by providing affordable mortgage programs, small business loan products, community development financing, funding for non-profit housing and economic development programs, etc.

Banks are regularly examined by the federal government to determine if they are meeting their CRA obligations.  Because an unsatisfactory CRA rating or questions about CRA performance can result in delays or denials of mergers, acquisitions or the expansion of services, banks often look for ways to maintain or improve their CRA records.


How can I or my agency maximize the benefits of CRA to promote housing and economic opportunity in my community?

To maximize the benefits of CRA within local communities, NCRC encourages community stakeholders to develop a CRA strategy that involves a combination of any or all of the following activities:

  • Submit written comments on the community reinvestment performance of banks in your local area when these banks undergo their regular CRA examinations;
  • Monitor bank mergers, acquisitions and expansions to identify strategic opportunities to encourage banks in your local area to improve their community reinvestment records;
  • Meet periodically with banks operating in your local area, even if they are performing well on their CRA exams, to discuss your community’s credit/capital/bank service needs and to suggest actions a bank can take to better meet those needs;
  • Meet with bank regulators to discuss the performance of specific banks, as well as improvements to the CRA exam process;
  • Encourage your local government or other local institutions with substantial bank accounts (e.g., churches, foundations, etc.) to establish a linked deposit program to ensure that only those banks with reasonable community reinvestment records are eligible to benefit from a financial relationship with major local depositors; and
  • Become a shareholder advocate – owning even a small number of shares in a publicly-held bank allows you to introduce, vote on and/or speak at shareholder meetings about shareholder resolutions that address community reinvestment concerns.


Remember to This e-mail address is being protected from spambots. You need JavaScript enabled to view it if you need assistance implementing any of these CRA-related activities.


How can I or my agency participate in the CRA exam process to benefit my community and clients?

Comments made by community stakeholders (including non-profits, local government agencies and individuals) that highlight strengths or weaknesses in a bank’s performance with regard to lending, investments or service provision that benefit underserved groups can have a strong influence on a bank’s CRA rating, as well as on the ongoing actions a bank takes to promote housing, financial and economic opportunity for traditionally underserved populations.

You can submit comments on a bank’s community reinvestment performance at any time.  If a bank is not undergoing a CRA exam at the time you submit your comments, simply instruct the bank and its federal regulator to place your CRA comments in the bank’s public file.  The next time a CRA exam occurs, the federal examiner is required to look at comments in the public file and the bank is required to report how it responded to any concerns raised.

NCRC can provide guidance and data analysis to help you develop your comments on a bank’s CRA record.


Why should community stakeholders meet regularly with banks to discuss CRA-related activities?

Community agencies and other stakeholders can approach banks, particularly those that receive poor CRA ratings, to suggest ways that financial institutions can improve their community reinvestment performance.  The development of mutually beneficial relationships between banks and community stakeholders has resulted in funding for housing counseling programs; new loan products that better serve small business entrepreneurs; increases in the number of bank branches in underserved neighborhoods; investments in local community and economic development loan programs and projects; financing for affordable mortgage products; sound credit alternatives to predatory payday loan products; etc.

To see if there are any specific issues you may want to discuss with a bank, you can check the results of that bank’s last CRA exam at http://www.ffiec.gov/craratings/default.aspx or you can contact NCRC for an analysis of a bank’s CRA-related performance.  NCRC can also help you prepare for your meetings with banks.


Why do bank mergers, acquisitions and expansions present a strategic opportunity to encourage banks to enhance their product/service offerings and/or to support programs that benefit traditionally underserved groups?

If valid questions about a bank’s CRA performance record are raised when financial institutions are engaged in a merger, acquisition or expansion process (particularly if the bank received a low CRA score on it’s last exam) federal regulators may delay or deny the merger, acquisition or expansion application involving that bank.  To avoid such costly delays, the financial institution(s) involved will often work with community stakeholders to develop a community reinvestment plan that addresses the problem(s) and that identifies specific funding and/or new products, services or investments the bank will offer in order to promote housing and economic opportunity for traditionally underserved groups.

To find out if there are any pending merger, acquisition or expansion applications that may impact your community and/or for assistance in preparing your response, call NCRC’s Membership Department at (202) 628-8866.


How can NCRC help me or my agency prepare CRA-related comments or engage in CRA-related discussions with banks?

NCRC can provide a detailed analysis of a financial institution’s community reinvestment record that addresses how well the bank serves the needs of low- and moderate-income and/or minority households through its basic banking, lending and investment services.  This analysis is provided FREE to NCRC members.

NCRC staff can also provide guidance on how to prepare CRA-related comment letters and engage in negotiations with financial institutions to secure funding, products and services that promote housing and economic opportunity for low- and moderate-income and minority clients.  Staff can help members frame and support their appeal and determine what community investment commitments it might be appropriate to ask a bank to make (e.g., develop new products that better serve small business entrepreneurs, fund housing counseling programs, invest in a housing/community development or small business loan fund, etc.).

In addition, NCRC members can communicate with other coalition members via our listserv to find out what has worked in other communities, see examples of comment letters written to regulatory bodies and, of course, elicit support from other allies for their CRA-related activities.


How can I or my agency get help from NCRC to support our CRA-related activities?

Staff from NCRC’s Membership, Research and Legislative/Regulatory Affairs Departments are available to provide you with the support you need to utilize CRA to promote housing and economic opportunity in your community.  To start the process, contact NCRC at (202) 628-8866.

Access Reinforced by Strategy

florist picNCRC operates a variety of business development initiatives that support business ownership and entrepreneurship among people of color and women. We provide resources for entrepreneurial initiatives in low and moderate-income communities, working with policymakers and financial institutions to increase small business lending to women, minorities and low- and-moderate-income communities. Our centers provide assistance to women and minority entrepreneurs in the Washington, DC and New York areas:

programs-and-issues

The DC Women’s Business Center provides training and consultation to assist in the growth of women-owned businesses, as well as technical assistance to women-owned businesses interested in federal and local government procurement opportunities.

The Washington, DC MBDA Business Center helps minority firms compete by knocking down the barriers to growth and helping them maintain a profitable bottom line. Through an extensive network, DCMBDA helps clients  to procure capital, and works side-by-side with them to streamline operations.

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NCRC extends its small business development initiatives to Houston via newly opened Houston Minority Business Enterprise Center

Houston, TX— The National Community Reinvestment Coalition (NCRC) announced today the opening of the Houston Minority Business Enterprise Center (HMBEC). Located downtown in the Houston Technology Center at 410 Pierce Street, the HMBEC will provide training and technical assistance to minority-owned businesses. Aligned with NCRC's mission to promote access to credit and capital to underserved communities, the Houston MBEC will join NCRC's two thriving business development initiatives: the DC Minority Business Enterprise Center (DC MBEC) and the DC Women's Business Center (DC WBC).

"We are proud that we can bring to Houston what our DC Minority Business Enterprise Center has been successfully providing to minority businesses in the Washington, DC region: the tools they need to access capital, and to create and sustain business growth," said Owen Jackson, Vice President for Business Development at NCRC.

The Houston center is headed by Director Christopher Bilton. Joining Bilton on the HMBEC staff are Mark Praigg, Business Consultant, and Janet Murillo, Administrative Assistant & Business Consultant.

Christopher Bilton, Director of HMBEC said, "We're confident that the HMBEC will be a standout in the region and of real service to the business community in Greater Houston. We look forward to advancing NCRC's work, by creating the conditions for business growth and ensuring the economic sustainability of minority business enterprises in the Houston area."

The Houston MBEC is operated by NCRC and funded in part by a grant from the Department of Commerce Minority Business Development Agency (MBDA). Comparable to the DC MBEC, the Houston MBEC will offer professional services and expert advice to existing minority business enterprises grossing $500,000 or more in annual revenue. HMBEC offers advice on access to capital, finance, accounting, business management and development, government contracting, marketing, strategic planning, and bonding and venture capital investing.

 

For media inquiries, please contact Jesse Van Tol at 202-464-2709 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it '; document.write( '' ); document.write( addy_text12137 ); document.write( '<\/a>' ); //--> This e-mail address is being protected from spambots. You need JavaScript enabled to view it . For more information about the HMBEC, please contact Christopher Bilton, Director, at (713) 357-9559 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it

About the National Community Reinvestment Coalition (NCRC):

The National Community Reinvestment Coalition is an association of more than 600 community-based organizations that promote access to basic banking services, including credit and savings, to create and sustain affordable housing, job development, and vibrant communities for America's working families. http://www.ncrc.org/

 

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Washington, DC -- Today, Owen Jackson, Vice President of Business Development at the National Community Reinvestment Coalition (NCRC) will give testimony before the Congressional Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies and will call upon Congress to reverse proposed cuts to the Department of Commerce’s Minority Business Development Agency (MBDA).

MBDA supports Business Centers across the nation. These centers help minority-owned small businesses gain access to capital, contracts and financing. The current budget proposal reduces the MBDA’s funding by $1.5 million in 2013.

“Less funding for MBDA Business Centers means fewer resources for small businesses,” said Jackson. “A key part of our economic recovery lies in our willingness to invest in America’s small businesses in order to spur job creation.”

In the past three years, MBDA Business Centers have helped small businesses obtain $10 billion in contracts and create 15,000 net new jobs.The program has generated a 125 percent return on investment for every dollar of funding.

NCRC has called on Congress to budget $32 million for the MBDA in 2013, which would match the 2008 funding level. NCRC President and CEO John Taylor made the following statement:

“These budget cuts would undermine a successful program that has a proven track record at creating jobs and helping small businesses grow,” said Taylor. “Small businesses create two out every three new jobs, and are integral to the nation’s economic recovery. We urge Congress to restore funding so this program can enable additional economic growth.”

NCRC is the only non-profit organization in the country that operates three MBDA Business Centers, with centers in Washington, D.C., New York, NY, and Houston, TX. NCRC also manages a Women’s Business Center and Small Business Teaming Center sponsored by the U.S. Small Business Administration, and a small business development loan fund.

 

About the National Community Reinvestment Coalition (NCRC):
The National Community Reinvestment Coalition is an association of more than 600 community-based organizations that promote access to basic banking services, including credit and savings, to create and sustain affordable housing, job development, and vibrant communities for America's working families.

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Washington, DC – Today, the National Community Reinvestment Coalition (NCRC) announced that the NCRC Community Development Fund has received certification from the Community Development Financial Institutions Fund as a Community Development Financial Institution (CDFI).

“We are very excited to receive CDFI certification,” said NCRC President and CEO John Taylor. “This certification will allow NCRC to further build out our financial and technical assistance services for small businesses and minority- and women-owned small businesses.”

The National Community Reinvestment Coalition operates three U.S. Department of Commerce-sponsored Minority Business Centers (in Washington, DC, New York, NY, and Houston, TX), a Women’s Business Center sponsored by the U.S. Small Business Administration (SBA), and an SBA Small Business Teaming Center. The NCRC Community Development Fund (NCRC CDF) is a small business investment fund that measures the success of its investments by financial return, positive social impact, and environmental benefits in its current target market of the District of Columbia, with plans to serve women- and minority-owned businesses nationwide in the future.

To date, NCRC CDF, through the Fund and the NCRC Small Business Center affiliates, has counseled and provided technical assistance to over 1,500 small businesses, assisted in securing over $2 billion in financing and contracts, created over 150 new jobs, and directly lent $150,000 to women, minority, and low-income owned businesses in the District of Columbia Metro area.

About the National Community Reinvestment Coalition (NCRC):

The National Community Reinvestment Coalition is an association of more than 600 community-based organizations that promote access to basic banking services, including credit and savings, to create and sustain affordable housing, job development, and vibrant communities for America's working families.

Published in Press Releases

Washington, DC - Today, the National Community Reinvestment Coalition (NCRC) released a report entitled “Access to Capital and Credit in Appalachia and the Impact of the Financial Crisis and Recession on Commercial Lending and Finance in the Region.” The report, which was commissioned by the Appalachian Regional Commission, and authored by NCRC and Woodstock Institute, details trends in the availability of capital and credit to small businesses in the Appalachian Region. The Appalachian region, as defined by the Appalachian Regional Commission, is a “205,000-square-mile region that follows the spine of the Appalachian Mountains from southern New York to northern Mississippi. It includes all of West Virginia and parts of 12 other states: Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, and Virginia.” The report finds that while Appalachia trailed the nation in economic development before the recession, the disparity grew drastically between 2007 and 2010, at the height of the economic crisis.

“This study highlights the fact that Appalachia experienced an especially severe economic downturn,” said NCRC President and CEO John Taylor. “Historically underserved areas such as Appalachia were hit hard by the Great Recession and are still struggling to regain lost ground. It is imperative that both public and private institutions work together to strengthen small business lending and community development.”

“Small businesses are engines for job creation,” said Dory Rand, president of Woodstock Institute. “Access to capital for small businesses will be critical to the economic recovery of underserved regions, like Appalachia. Unfortunately, this report shows that lending trends are heading in the wrong direction in communities that badly need investment.”

The report shows a decline in small business lending during the recession that not only slowed business growth in Appalachia at a greater rate than the rest of the nation, but also furthered the regional split between economically stronger counties in urban areas and disadvantaged and rural counties. In 2007, more than half of small businesses nationwide received loans, but by 2010 that number had plummeted to less than a quarter, while loans to small businesses in Appalachia dropped to 18 percent below national levels. In 2009, credit was denied to slightly under 9 percent of small businesses across the nation, while in Appalachia almost 23 percent were turned away. Lending levels in the most disadvantaged counties of Appalachia were even lower, at 44 percent of national rates.

Access to banking remained a problem in Appalachia, the report shows. While there was a modest increase in bank branches in Appalachia between 2007 and 2010, the rate of lending was still much lower than nationwide, despite regional bank assets of nearly $500 billion. In 2010, banks issued 41 small business loans per branch across the nation, while in Appalachia, banks provided 25 loans per branch. Furthermore, the increase in branches of banks not headquartered in Appalachia disproportionally occurred in the economically advantaged counties. As a result of all these trends, small business owners in Appalachia than the nation were more likely to rely on credit cards and personal savings to finance their businesses.

Appalachia also lacks access to equity financing. Only 5 percent of the businesses in Appalachia that sought angel capital succeeded in acquiring it, compared to 20 percent of firms nationally. Community Reinvestment Act (CRA)-covered banks in Appalachia made $762 million in investments in affordable housing, compared to just $150 million in small businesses from 2007 through 2011.

Lending by Community Development Financial Institutions  (CDFIs) rose significantly and CDFIs effectively targeted disadvantaged communities for development. In contrast, Small Business Administration (SBA)-backed lending in 2010 was 30 percent less in Appalachia than the rest of the nation and was not focused on disadvantaged counties. Both CDFI and SBA-backed lending was small compared to conventional bank lending, suggesting that CDFIs and SBA programs cannot be counted on to counteract all disparities but should be targeted in a strategic manner to a subset of counties.

The report offers a number of recommendations for stakeholders in the region to improve capital and credit access through existing structures and new initiatives:

•      CRA exams should increase attention to rural areas and locations with fewer bank branches to provide a comprehensive assessment of regional credit needs and better target underserved areas. For banks headquartered in Appalachia, CRA exams should focus more on lending and equity investments in small businesses.

•      Public and private sector partnerships should increase access to credit, equity financing, and small business technical assistance programs.

•      Bank branching should be encouraged, particularly in disadvantaged counties, since lending is higher in counties with more branches. New York state operates a program supporting branching in underserved areas, which can serve as a model for increasing branching elsewhere in Appalachia.

•      CDFIs in Appalachia are effectively targeting distressed counties and should be supported by greater access to public and private sector financing. Stakeholders should improve the targeting of SBA-backed lending to distressed counties.

•      The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires the Consumer Financial Protection Bureau (CFPB) to improve the publicly available small business loan data to include the race and gender of the borrower and to require more financial institutions to report data. This would help tremendously in understanding lending patterns and credit gaps in regions like Appalachia. The CFPB should expeditiously implement this data requirement.

NCRC will host a free webinar on the report’s findings on December 9 at 2 P.M. EST. To register, visit here.

To view the full report, visit here.

About the National Community Reinvestment Coalition (NCRC):

The National Community Reinvestment Coalition is an association of more than 600 community-based organizations that promote access to basic banking services, including credit and savings, to create and sustain affordable housing, job development, and vibrant communities for America's working families.

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New York City, NY -- This month, the National Community Reinvestment Coalition's (NCRC) New York City Minority Business Center will begin a working collaboration with the National Minority Angel Network (NMAN), a new organization dedicated to fostering investment in minority-led and owned start-up businesses. To kick off this new collaborative initiative to connect minority-led and owned businesses with investors, the New York City Minority Business Center and NMAN will cohost a reception for potential investors on May 30, 2012 at 5:30 pm.

NCRC's New York City Minority Business Center provides management and business consulting services to minority business enterprises, and utilizes strategic partnerships to improve minority-owned companies' performance and profitability. NMAN works to provide mentorship, educational events, and capital to minority-led and owned startups across America. The New York Minority Business Center will work with NMAN to identify appropriate minority-led and owned businesses and connect them with "angel investors" who will commit capital and resources to those businesses.

NCRC President and CEO John Taylor made the following statement: "We are excited to bring people together to create jobs and build opportunities for small business owners through this new initiative. Allowing full participation in business creation and development is an important part of economic justice, and NCRC is dedicated to leveling the playing field, and ensuring that everyone gets a fair shot to prosper and thrive."

Timothy Reese, Founder and Principal of NMAN said: "We are excited about our New York City launch in partnership with NCRC. We believe recent activity for high-growth startups in New York provides ideal conditions to be launching our program here at this time before rolling out to other regions in the U.S."

The reception will be held on May 30, 2012 from 5:30-7:30 PM at the New York City Minority Business Center. The New York City Minority Business Center is located at 114 West 47th Street, 19th Floor. This event is open to press. For more information please contact Eric Hersey at 202-524-4880.

NCRC is the only non-profit organization in the nation that operates three MBDA Business Centers, with centers in Washington, D.C., New York, NY, and Houston, TX. NCRC also manages a Women's Business Center and Small Business Teaming Center sponsored by the U.S. Small Business Administration, and a small business development loan fund.

 

About the National Community Reinvestment Coalition (NCRC):
The National Community Reinvestment Coalition is an association of more than 600 community-based organizations that promote access to basic banking services, including credit and savings, to create and sustain affordable housing, job development, and vibrant communities for America's working families.  
About the National Minority Angel Investor Network (NMAN):
The National Minority Angel Network is a unique financing model based on the good of Capitalism when targeted to specific business and community goals. NMAN targets minority entrepreneurs who have excelled academically or professionally but are first time entrepreneurs. We seek to link them with successful, high-net-worth Americans who share NMAN's desire to diversify the business community and broaden prospects for long term wealth creation.

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Published in Press Releases

Washington, DC -- On Tuesday, July 24, the National Community Reinvestment Coalition's Small Business Teaming Center will hold an event to introduce the procurement community to the concept of small business teaming, and give small business owners the opportunity to network. NCRC's Small Business Teaming Center puts together teams of small businesses with complementary capabilities to allow them to compete for large federal contracts they would not be able to win individually. The center is funded by the U.S. Small Business Administration (SBA) and managed by the National Community Reinvestment Coalition.

"Small business teaming is an innovative concept that will open up lucrative opportunities for small businesses. We are excited to be on the cutting edge, promoting and facilitating small business growth in a new way," said NCRC President and CEO John Taylor.

The event will be attended by small business owners, corporate small business liaisons and representatives from government agencies, and will feature remarks from senior Small Business Administration officials.

The event will be held from 10 a.m. to 12 p.m. at SunTrust Bank on 1445 New York Avenue NW, 9th Floor, Washington, DC. It is open to members of the press. For more information contact Eric Hersey at (202) 524-4880 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

In addition to its Business Teaming Center, NCRC is the only non-profit organization in the country that operates three MBDA Business Centers, with centers in Washington, D.C., New York, NY, and Houston, TX. NCRC also manages a Women's Business Center sponsored by the U.S. Small Business Administration, and a small business development loan fund.

About NCRC

The National Community Reinvestment Coalition is an association of more than 600 community-based organizations that promote access to basic banking services, including credit and savings, to create and sustain affordable housing, job development and vibrant communities for America's working families. To find out more, visit http://www.ncrc.org.

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