Recent conversations pointing to the Community Reinvestment Act as the cause of the foreclosure crisis and credit market crisis are an attempt to deflect attention away from the real problem affecting our financial system. That problem is failed regulatory policy and oversight.

For more than a decade, community leaders, civil rights proponents and housing groups have raised concerns about unfair, deceptive and abusive lending practices that have undermined homeownership aspirations for millions of working families. Those pleas for better regulatory policy and oversight not only went ignored, in some cases they were contradicted by regulatory policy that made predatory lending more virulent and prevalent in low-income neighborhoods and communities of color.

Over that same period, thousands of pages of local, state and federal testimony, peer reviewed policy papers and speeches (many from the groups signed onto this statement) have forewarned of a pending crisis stemming from lax regulatory oversight and enforcement. Yet no serious federal response was made. As Harvard University law professor Elizabeth Warren has artfully stated, consumers had better protection buying a toaster or microwave oven than they had when purchasing the family home.

One example of regulatory failure is that many vital financial institutions – and the products they created and sold -- were not covered by meaningful regulation. Some market players clearly knew their actions were creating a potential market crisis. A Securities and Exchange Commission (SEC) Report recently found that in December of 2006 one analytical manager at a prominent credit rating agency wrote to another senior analytical manager to say “let’s hope we are all wealthy and retired by the time this house of cards falters.”

Improved regulation of the financial system – including brokers, lenders, appraisers, rating agencies and securitizers – was essential. If the Community Reinvestment Act – and other appropriate regulation -- had been applied to independent mortgage companies and other non-bank financial institutions, it is likely that our nation would not be confronted with a foreclosure crisis. Critics of the law conveniently ignore that about 75 percent of sub-prime loans were not covered by CRA. They also ignore the fact that most reckless and damaging subprime lending occurred between 2003 and 2007, long after CRA’s passage in 1977.

CRA exams provide clear and strong incentives for banks to make safe and sound loans and penalize them for making loans that are unfair and abusive. CRA is an antidote, not a cause of the current crisis. 

Signed by:

Accion USA / Chicago / New Jersey / New York
Advocates for Basic Legal Equality
Affordable Housing Resources
AHEAD Inc.
American Community Partnerships
Americans for Fairness in Lending
Baltimore Neighborhoods, Inc.
Bay Area Women's Center
Bayaney Remnant Community, UNPA
Beacon Development Group
Beyond Housing/ Neighborhood Housing Services
Bienestar
Brazos Valley Affordable Housing Corporation
Building Changes
CA Community Economic Development Association
California Reinvestment Coalition
Cambridge Neighborhood Apartment Housing Services
Capitol Hill Housing
CDC of Long Island
CDC Resource Consortium Inc.
CDFI Coalition
Center for American Progress
Center for Economic Progress
Center for Responsible Lending
Central Alabama Fair Housing Center
Chattanooga Neighborhood Enterprise
Cincinnati Change, Inc.
Cincinnati Housing Partners
Clackamas Community Land Trust
Cleveland Action to Support Housing, Inc.
Cleveland Housing Network
Coalition For A Better Acre
Coalition for Social Justice
Coastal Enterprises, Inc.
Codman Square Neighborhood Development Corp
Collinwood Nottingham Villages Development Corporation
Colorado Rural Housing
Common Ground
Common Wealth Development, Inc.
Community Action Committee of the Lehigh Valley
Community Action New Mexico
Community Action Team, Inc.
Community Development Corp.
Community Economic Development Association of Michigan (CEDAM)
Community Enterprise Investments, Inc.
Community Housing Partners Corporation
Community Housing Solutions
Community Reinvestment Association of North Carolina (CRA-NC)
Community Reinvestment Fund, Inc.
CommunityWorks North Dakota
Consumer Action
Consumer Counseling Northwest
Consumer Federation of America
Consumers Union
DASH
Delhi Center
Delridge Neighborhoods Development Association
Dēmos: A Network for Ideas & Action
Detroit Shoreway Community Development Organization
DHIC, Inc.
Disability Network/Lakeshore
Drum Major Institute for Public Policy
East Bay Housing Organizations
East Columbus Development Co
Edison Neighborhood Association, Inc.
El Puente Community Development Corporation
Enterprise Community Partners
Enterprise Corporation of the Delta, Inc. (ECD/HOPE)
Escambia County Housing Finance Authority
Evergreen Housing Development, LLC
Exceed, Inc
Fair Housing Council of the San Fernando Valley
Fairfax Renaissance Dev. Corp.
Farmworker Housing Dev. Corp.
Finance Fund
Foundation Communities
Genesis Non-Profit Housing Corporatoin
Give Me Back My Credit!
Good Samaritan Ministries
Great Lakes Capital Fund
Greater Rochester Community Reinvestment Coalition
Greater Washington Hipsanic Chamber of Commerce
Habitat for Humanity Seattle/South King County
Hacienda CDC
Harvard Community Service Center
HBC Services Inc.
HHWP Community Action Commission
Historic District Development Corporation
HomeSight
Homestead Capital
Homestead Community Land Trust
HomeStretch Nonprofit Housing Corporation
Homewise
Housing Assistance Council
Housing Association of Delaware Valley
Housing Development Consortium of Seattle-King County
Housing Development Fund, Inc.
Housing Leadership Council of San Mateo County, Calif.
Housing Network of Rhode Island
Housing Partnership, Inc.
Housing Resources Group
Illinois Facilities Fund (IFF)
INCREASE Community evelopment Corp
Individual
Innovative Housing, Inc.
Intercommunity Mercy Housing
INTERDENOMINATIONAL ASSN OF CHURCHES, INC.
Interfaith Houisng Alliance, Inc
Isles Community Enterprises
Jamboree Housing
Kamm's Corners Development Corp.
Lafayette Neighborhood Housing Services, Inc.
Laredo- Webb NHS
Lawyers' Committee for Civil Rights Under Law
Leadership Conference on Civil Rights
Local Economic and Employment Development Council, Inc. (LEED)
Local Initiatives Support Corporation
Louisiana Community Reinvestment Coalition
Louisville Community Development Bank
Manna, Inc.
Marshall Heights Community Development Organization
Massachusetts Affordable Housing Alliance (MAHA)
Massachusetts Association of Community Development Corporations
Maui Economic Opportunity (MEO) Business Development Corporation
Metropolitan Milwaukee Fair Housing Council
Metropolitan St. Louis Equal Housing Opportunity Council
Michigan Community Reinvestment Coalition
Mid Central Community Action, Inc.
Montgomery Housing Partnership
NAACP
National Alliance of Community Economic Development Associations
National Association for Latino Community Asset Builders
National Association of Consumer Advocates
National Association of Housing and Redevelopment Officials (NAH
National City Bank
National Committee for Responsive Philanthropy
National Community Reinvestment Coalition (NCRC)
National Consumer Law Center (on behalf of its low income clients)
National Council of La Raza
National Council of Negro Women
National Housing Conference
National Housing Institute (NHI)
National League of Cities
National Low Income Housing Coalition
National NeighborWorks Association
National Policy and Advocacy Council on Homelessness (NPACH)
National Rural Housing Coalition
National Urban League
Nazareth Housing Inc.
Nazareth Housing Services
Near Southeast CDC
Nehemiah Community Reinvestment Fund
Neighborhood Economic Development Corporation
Neighborhood Housing Services of Baltimore
Neighborhood Housing Services of Duluth
Neighborhood Housing Services of Greater Cleveland
Neighborhood Housing Services of NYC
Neighborhood Housing Services of the Lehigh Valley, Inc.
Neighborhood Housing Services Oklahoma City
Neighbors Helping Neighbors
NeighborWorks Northeast Nebraska
NeighborWorks of Grays Harbor County
NeighborWorks Rochester
NeighborWorks Western Pennsylvania
Nevada Fair Housing Center, Inc
New Directions Housing Corporation
New Jersey Community Capital (Community Loan Fund of New Jersey)
New York State Rural Housing Coalition Inc.
NHS of Beloit
NHS of Chicago
NHS of Orange County
NHS of Richland County
NHS of the South Shore
NHS Phoenix
Northeast Shores Development Corporation
NYANA Business Center
NYS Rural Advocates
Oak Hill CDC
Ohio Community Development Corporation AssocIation CDC
Old Brooklyn CDC
Operation Threshold
Opportunity Finance Network
Oregon Opportunity Network
Pacific Coast Regional Small Business Development Corporation
Pathfinder Services, Inc.
Paw Paw Housing Commission
Pittsburgh Community Reinvestment Group
Plymouth Housing Group
PolicyLink
Portland Community Land Trust
Portland Housing Center
Quality Solutions CDC
Rainbow PUSH Coalition
REACH, Community Development, Inc.
River Cities Development Svcs
ROLLINS COLLEGE
ROSE Community Development
Rural Opportunities, Inc.
Rural Ulster Preservation Company
Salem-Keizer CDC
Salisbury Neighborhood Housing Service, Inc.
Samaritan Project Development Corporation
San Diego Housing Federation
Scott County Housing Council
Select Milwaukee, Inc.
SNHU's School of Community Economic Development
South Carolina Association of Community Development Corporations
Southwest Oklahoma Regional Development Corporation
Spokane Low Income Housing Consortium
The BACH Foundation
The Greenlining Coalition
The Housingartnership Inc
Toledo Fair Housing Center
TXS United Housing Program, Inc.
U.S. PIRG
Umpqua CDC
UNHS NeighborWorks HOC
United Neighborhood Centers of Northeastern Pennsylvania
United Neighborhoods, Inc.
United Neighbors, Inc.
United South Broadway Corporation
Urban Land Conservancy
US Conference of Mayors
US Jesuit Conference
Venture, Inc
VLO Group New England/VLO Group Community Enterprise, Corp
Washington Community Reinvestment Association
Westchester Residential Opportunities, Inc.
Westmoreland Human Opportunities
Woodstock Institute