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Reinvestment Works

Reinvestment Works

NCRC was honored to be selected by HUD to conduct this National Education and Outreach Initiative across the country to discuss the Affirmatively Furthering Fair Housing (AFFH) obligation and promote inclusive communities for local and state housing and community development, public housing, economic development, planning, and transportation staff; many of whom had never received any previous fair housing training.

To date, NCRC has successfully conducted nine (9) two-day colloquies for 392 public and private housing and community development professionals from local and statewide offices and agencies.  These trainings took place in Los Angeles, CA, Washington, DC, Brooklyn, NY, Chicago, IL, Denver, CO, Charleston, SC, Orlando, FL, Cleveland, OH and Austin, TX.  Overall, participants’ evaluations reflected great appreciation for the instructors’ expertise and quality of the presentations.  Additionally, attendees expressed that they were pleased to have the opportunity to discuss and participate in exercises that expanded their knowledge about this little known civil rights requirement.

How NCRC’s Pro Bono Data Analysis Service Can Empower Your Organization

An NCRC motto is “Data drives the movement for economic justice.” Analysis of publicly available data is necessary in order to determine if a particular bank(s) is engaged in a pattern and practice of abusive or discriminatory lending or if the bank(s) is lending in a fair and responsible manner. For years, NCRC has engaged in pro bono data analysis for its member organizations as a means for empowering them to advocate for more responsible lending in their community. What is different in recent years is that NCRC has committed more community organizing resources to promote sustained use of data analysis and to follow-up with our members to determine if the data analysis was successful in their advocacy campaigns.

On an annual basis, NCRC will provide 30 to 50 pro bono data analyses to our member organizations from across the country. In the last few weeks, NCRC has provided data analysis to two southern-based organizations, the Birmingham Business Resource Center and the New Orleans Neighborhood Development Foundation, that reveals racial disparities in lending and uncovers particularly problematic lending patterns at one regional bank, Iberia Bank. As the accompanying map powerfully illustrates in the Birmingham, Alabama metropolitan area, Iberia did not issue a single home loan in a predominantly minority census tract (more than 50 percent of the residents are minority).

Some may say that the bank’s small lending volume (69 loans) in Birmingham may make judgments about fair lending performance inconclusive. However, the performance in the New Orleans metropolitan area, where Iberia issued 788 loans during 2011 (the most recent year available) confirms that its racial disparities in lending need to be further investigated. In New Orleans, minority census tracts contain 29 percent of owner-occupied housing units, yet Iberia issued just 11 percent of its home loans in these tracts. Iberia also issued a lower percentage than its peers; all lenders, as a group, made 15 percent of their loans in these tracts. The map and bar graph again illustrates the paucity of lending in minority neighborhoods.

Since two key NCRC members are interested in the performance of Iberia, opportunities for community organizing across state lines on a regional basis exist. Our two member organizations can discuss strategies which could range from sending comment letters to the banks’ Community Reinvestment Act (CRA) public file (even when a CRA exam is not occurring), commenting on a merger application if the bank seeks to acquire another bank or be acquired, to seeking a meeting with senior officials at the bank. NCRC regional organizers can help these two members assemble coalitions of concerned organizations in at least two states, which will form a more powerful constituency for influencing the banks’ behavior than groups acting alone.

NCRC’s data analysis can also be used to promote public policies, in particular local responsible banking ordinances. Under a local responsible banking law, a city will evaluate banks’ reinvestment and fair lending performance as part of its decision in which banks to place deposits. NCRC has a model local responsible banking ordinance that can assist NCRC members and allies in advocating for ordinances in their locality.

In the coming weeks, NCRC will be helping Jewish Community Action in Minneapolis to advocate for a local ordinance by assessing unmet needs. Specifically, NCRC will be analyzing disparities in how many deposits major banks receive from inner city neighborhoods and how many loans they make in these neighborhoods. In addition, NCRC will be helping the San Diego City and County Reinvestment Task Force provide information to the City in implementing its newly passed ordinance. NCRC will be analyzing the CRA and fair lending performance of major banks. Our member organization will present the results of this analysis to the City as decides which institutions will receive its deposits.
NCRC invites our member organizations to consider how they can increase responsible lending and investing in their communities. When members want to consider a plan or campaign for increasing responsible lending, NCRC’s Membership and Research Departments will work with them to devise a campaign and craft the most effective data analysis. There is power in the numbers!

For more information contact, Josh Silver, Vice President of Research and Policy, at 202-464-2708, or the NCRC regional organizer for your area.

NCRC Regional Organizers:

Caitie Rountree
Northeast
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202-464-2727

MD, DE, PA, NJ, NY, RI, CT, NH, MA, ME, VT, TX, LA, TX, OK, AR
Torey Hollingsworth
West
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202-383-7719
WA, OR, CA, ID, NV, AZ, UT, MT, WY, CO, NM, KS, NE, SD, ND, MN, IA, MO, TX, OK
Makia Burns
Midwest
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202-383-7701

WI, MI, IL, IN, OH, WV, KY
Ramon Bullard
Southeast
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202-524-4877
FL, GA, SC, NC, VA, TN, MS, AL, LA, AR

NCRC has been working persistently to enhance the implementation of the Community Reinvestment Act (CRA). In 2010 when the federal banking agencies held hearings on improving CRA, NCRC and several of our member organizations testified and asserted that bolstering CRA was needed to increase responsible lending and investing as well as to prod banks to modify loans of distressed homeowners and engage in other foreclosure prevention efforts.

Since the hearings, the federal agencies have not proposed changes to the CRA regulation but they are currently considering reforms to examination procedures that could be motivate more bank financing for community reinvestment. In response, NCRC gathered the signatures of hundreds of NCRC members and allies for our letter recommending CRA improvements to the agencies. The letter was sent to the agencies in early October. NCRC will keep our members informed of any plans the agencies may undertake to bolster the rigor of CRA exams.

The CRA exam is a report card for banks with ratings for their lending, investing, and services in low- and moderate-income neighborhoods. If the CRA exam grades banks rigorously and fairly, banks will increase their financing for community reinvestment. Public comments can influence the overall ratings banks receive or ratings in particular geographical areas.

CRA exams will be more effective in making sure all communities are served if they engage in a full review of lending, investing, and services in a wide variety of geographical areas. Currently, the geographical scope of exams is restricted. Many CRA exams of large banks will conduct a full scope, thorough review of bank performance in large metropolitan areas but will do a limited scope, light review in smaller metropolitan areas and rural counties, even if a bank has made considerable numbers of loans in these areas.

In our letter to the agencies, NCRC proposed two possible remedies to inadequate geographical coverage. Under one alternative, the agencies could randomly select geographical areas for full scope review. Banks would not know which areas would be selected for the most comprehensive reviews so they would need to perform well in all areas (urban and rural) in which they made a significant number of loans. If the agencies do not opt for the random assignment approach, NCRC recommended that at least one smaller metropolitan area and one rural area in each state must be reviewed using the full scope exams.

NCRC also recommended a series of improvements to data tables in CRA exams. For example, community development lending and investing is often reporting in an inconsistent and/or cursory manner on CRA exams. NCRC suggested that exam tables report separate totals and dollar amounts of community development financing for affordable housing, small business financing, and economic development for each geographical area on the exam. The exam narrative should also regularly discuss innovative examples of community development financing and identify the non-profit or public sector partners collaborating with the banks so that readers of the exam can replicate innovative projects in their communities.

For the lending test, NCRC and our members have argued for several years that originating loans should count more than purchasing loans from other financial institutions. In our letter, NCRC maintained that presenting originations and purchases in distinct tables on exams would at least allow readers of exams to assess for themselves a bank’s performance in directly lending to communities. NCRC also asserted that making public input easier on exams was vital. In addition to publishing exam schedules, the agencies must indicate on their websites which staff can answer questions and which staff receives public comments on CRA exams.

In late October, NCRC also led a meeting involving several NCRC members and allies with the Consumer Financial Protection Bureau (CFPB) on implementing the improvements to the Home Mortgage Disclosure Act (HMDA) required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. These improvements include more information on loan terms and conditions, the age of the borrower, the value of the home, foreclosures, and credit score information. The HMDA changes should also bolster the ability of CRA exams to reward banks for safe and sound lending and penalize them for risky and abusive lending to low- and moderate-income borrowers. NCRC urged the CFPB to propose changes to HMDA and ask for public comments in an expeditious manner.

We will keep our members informed of developments regarding CFPB HMDA rulemaking and the banking agencies’ CRA deliberations. For more information contact, Josh Silver, Vice President of Research and Policy, at 202-464-2708, or the NCRC regional organizer for your area.

NCRC Regional Organizers and the regions they cover:

Caitie Rountree
Northeast
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
202-464-2727

MD, DE, PA, NJ, NY, RI, CT, NH, MA, ME, VT, TX, LA, TX, OK, AR
Torey Hollingsworth
West
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
202-383-7719
WA, OR, CA, ID, NV, AZ, UT, MT, WY, CO, NM, KS, NE, SD, ND, MN, IA, MO, TX, OK
Makia Burns
Midwest
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
202-383-7701

WI, MI, IL, IN, OH, WV, KY
Ramon Bullard
Southeast
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
202-524-4877
FL, GA, SC, NC, VA, TN, MS, AL, LA, AR



National Neighbors Silver (NNS), NCRC’s multi-year effort campaign to empower, organize, and support economically vulnerable older adults, is currently focused on developing a guide to “age friendly banking” – a standard that includes the services and products that financial institutions can offer to meet the needs of older adults. Currently, there are over 40 million older adults living in this country, and 23 million of them live at or below 250% of the Federal Poverty Level. Ensuring their economic security is vital to keeping older adults in their communities and living independently.  

Older adults are an underserved population with limited choices in terms of financial products and services geared specifically to their needs. It is important that financial institutions recognize and attend to those needs for many reasons. The traditional “three-legged stool” model of retirement, in which retirees would rely on their pensions, their assets and their social security, is deteriorating. Both private companies and public entities are reducing the value of pensions, if not doing away with them entirely. Older adults are frequently being targeted as victims of financial scams and fraud. In addition, the financial landscape is giving way more and more to internet based banking and many older adults are not comfortable with this change.

NNS has developed a set of guiding principles that financial institutions can follow that would make them “age-friendly.” These are:

  • Affordable financial management – financial institutions should provide affordable financial management, including no-cost financial education and free checking, savings, online banking, ATM transactions and teller services;
  • Access to critical income supports – financial institutions should sponsor benefits outreach and enrollment events, and work to prepare older adults for the March 1, 2013 transfer of all federal benefits to an electronic format, known as Go Direct, and reduce the costs for Go Direct;
  • Protection from financial abuse – financial institutions should offer low-to-no cost checking account flagging and fraud alerts as well as caregiver access to account transactions for tracking fraud and scams;
  • Facilitating aging in place – financial institutions should support programs and community endeavors that help older adults remain in their homes, and work with organizations and entities that offer transportation for older adults, and should provide sound advice and counseling on foreclosure prevention and reverse mortgages; 
  • Subsidized housing for low income older adults – financial institutions should make investments that support both housing development and service delivery;
  • Support aging services and advocacy – financial institutions should support aging services, including support for providers and advocates serving low- and moderate-income older adults; and
  • Accessibility of Banking Services – banks need to have well-designed branches with features such as sufficient seating and free water for customers, and they should have easy-to-navigate websites that are accessible to the visually impaired.


NNS is continuing to work with our NNS grantee partners across the country, as well financial institutions and aging experts, to further develop the age-friendly banking concept. NCRC will release a white paper on age-friendly banking early next year.

January 3, 2013 will be the first day of the 113th Congress. Both newly elected and returning lawmakers will need to arrive at the office ready to work. There are a number of important issues that Congress should address in the coming year, including mortgage refinance and principal reduction, enhancements to the Community Reinvestment Act, and reforming the government-sponsored enterprise system responsibly. Yet, all of these issues are likely to take a back seat to the immediate push to enact comprehensive tax reform.

The outcome of these tax reform efforts will have very real consequences for all of us. If the tax deductions, cuts, and credits enacted by the American Recovery and Reinvestment Act and the so-called "Bush tax cuts" are allowed to expire, every household can expect a sizeable increase in their tax bill. Not surprisingly, low- to moderate-income households and communities of color are likely to be among the hardest hit.

Tax reform could potentially have broad implications for community development, affordable housing, and homeownership. With both Democrats and Republicans agreeing that tax reform is necessary, Congress has already taken the first step by demonstrating a bipartisan interest. The second step will be for Congress to develop a framework, or a generally agreed upon set of strategies and goals, that will inform how the individual tax provisions are written. Deciding on a framework will be hard fought, as it will require Republicans and Democrats to reconcile their very different philosophies about how reform should occur.  The Administration and Congressional Democrats believe that a big part of the solution is to increase tax rates on those who earn significantly higher incomes and to reduce some tax expenditures. Congressional Republicans, however, tend to reject tax increases and prefer that additional revenue come from tax cuts which they argue generate economic growth for businesses.

Once Congress agrees to a basic framework, the actual work of drafting new tax code language will fall to various House committees. It is a possible that no actual language will be proposed until the end of 2013, or even early 2014. The only certainty is that a legislative stalemate is not the solution.

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