Policy Agenda For The 118th Session Of Congress
Investing in a Just Economy
For over 30 years, NCRC has worked to create a just economy. We believe capital of various forms must be engaged in building an equitable and fair economy. There is a legal obligation for banks and other financial institutions to invest in and lend in low- and moderate-income (LMI) communities. There is also a moral obligation to combat discrimination and to address the racial wealth divide and the overall concentration of wealth in society.
Our nation continues to face ongoing political and social crises, including racial injustice, economic insecurity, public health and climate change. Growing income and wealth inequality, a persisting Black-white homeownership divide and a pandemic that has left business owners and employees in greater financial insecurity all require bold and sustained remedial action. Civil rights, consumer, fair housing and other just economy advocates have urged our federal policymakers to move forward with the ambitious reforms and investments that are needed within every sphere of American society, including housing, access to credit, consumer protections, support for entrepreneurship and other aspects of community investment.
The Biden Administration and Congress have made important strides toward those ends. Since the release of our last Policy Agenda in early 2021, we have seen the emergence of critical regulatory initiatives, including the joint rulemaking to modernize the Community Reinvestment Act; commitments to expansive investments through the American Infrastructure and Jobs Act and the Inflation Reduction Act; a renewed commitment to civil rights enforcement, including anti-redlining oversight and progress on environmental justice; vigorous action on consumer protections; and steps taken toward more equitable housing finance.
Yet much more remains needed. As we continue our progress toward a more just economy, we must aim toward investments that are local in nature, reflect the future of our financial markets, expand our commitment to fair lending and fair housing and elevate support for communities through affordable housing, entrepreneurship and wealth development. NCRC calls for the following principles to inform our nation’s policies and investments:
NCRC continues to call for an invigorated and institutionalized commitment to fair housing and fair lending, as well as to affirmative measures to promote economic inclusion and remedy the racial wealth divide, across the whole of government. Regulators and Congress should promote targeted strategies that advance Black homeownership, such as housing counseling, the use of Special Purpose Credit Programs and first generation down payment assistance. They should also act in the interest of low-income renters, who are disproportionately households of color. Robust enforcement initiatives and support for advocacy groups in areas such as redlining discrimination, fair housing, environmental justice and other areas of fair lending have been growing in the right direction, but a heightened level of activity and strengthened policies remain needed. In addition, the Consumer Financial Protection Bureau (CFPB) should strengthen the application of disparate impact protections for credit transactions and implement small business data transparency requirements. Congress should provide for stronger enforcement of the Equal Credit Opportunity Act (ECOA). A strong Affirmatively Furthering Fair Housing regulation, alongside rigorous fair housing program standards and enforcement, should be a priority for the administration.
The Community Reinvestment Act (CRA) was enacted in 1977 to combat the extent and harms of redlining by banks. The statute is a recognition of the harms of geographic wealth extraction and failures to invest. Today, there remains a compelling mandate to safeguard against these harms and to strengthen credit, capital and development in local communities. The implementation of a strong, modernized CRA is central to achieving that mandate. Empowering local advocates to shape Community Benefits Agreements responsive to their needs, increasing the rigor of the exam process, due attention to fair lending and well-designed assessment policies are all parts of the path forward. Likewise, the equity challenges that the nation faces cannot be solved by banks alone. The obligation to invest locally and increase access to credit and capital in the communities hardest hit by the pandemic should apply broadly throughout the financial services sector—to mortgage companies, investment firms, credit unions and insurance companies.
Advances in technology and industry must aid, and not inhibit, needed progress in financial stability, housing affordability, homeownership and racial equity in financial services and wealth-building. Protecting consumers, homeowners and renters from abusive and unfair practices is critical as we work toward a just recovery. We must continue our work to ensure that financial technology innovation does not come at the expense of fair lending and fair rates. Online lenders and branchless banks should be held accountable to reinvest in the communities where they do business. We must also put safeguards in place to protect consumers when they use digital assets. Further, emerging investments in infrastructure and climate response must be harnessed to respond to the needs of those communities who are at the frontlines of environmental and climate harm and where an injection of those resources is most urgent. This requires deliberate policy designs, civil rights oversight and the engagement of impacted communities to ensure that economic opportunities relating to new infrastructure and the green economy flow where they are needed.
Invest in Community:
Investments in affordable housing, community economic development, small businesses and workforce and family supports are among the pillars of a thriving economy that works for all. The nation faces acute housing cost pressures and a housing supply deficit that shuts out too many first-time and first-generation homebuyers. We need a broad-based and multi-faceted strategy to expand the affordable housing supply, better equip first-generation homeowners to close the racial homeownership gap and ensure healthy and stable housing for renters. These solutions demand significant, overdue funding commitments from our government, as well as robust and sustained support from the housing finance system (including an overhaul of the Federal Home Loan Bank system). Our government should provide capacity to entities such as Community Development Financial Institutions (CDFIs) that work to support local economic growth. In addition, broadly expanded supports for families, such as the Child Tax Credit, paid leave and essential benefits programs such as nutritional support are foundational investments in broader economic security and participation. NCRC and its grassroots coalition of housing practitioners, housing counselors, organizers, community development advocates, consumer advocates and other proponents of a just economy stand ready to do the hard work necessary to move this ambitious agenda forward. We are committed to staying the course until this work is realized in every community across the country.