In the News

That law is “the thumb on the scale that gets banks to take a second look at the kind of financing these communities need,” said Gerron Levi?, senior director of government affairs for the National Community Reinvestment Coalition.

A study from the National Community Reinvestment Coalition that examined PPP loan applications captured specific examples of these biases. In some instances, it found that Black business owners with a comparable financial profile as white ones were less likely to be told that they met the qualifications needed for a loan.

The CRA followed the 1968 Fair Housing Act in (theoretically) ending redlining and encouraging banks to extend credit to low- and moderate-income (LMI) neighborhoods. Rather than establish another expensive federal program, “the genius of the CRA is that it was designed from its inception to tap into the financial might of the banking industry,” the National Community Reinvestment Coalition writes.

According to the National Community Reinvestment Coalition, “Neighborhoods considered high risk or “Hazardous” were often “redlined” by lending institutions, denying them access to capital investment which could improve the housing and economic opportunity of residents…HOLC examiners consulted with local bank loan officers, city officials, appraisers, and realtors to create “Residential Security” maps of cities.

The report by the National Community Reinvestment Coalition shows that life expectancies vary in Rochester by about five years between redlined and high-rated neighborhoods, according to government classifications dating from the 1930s.

When the National Community Reinvestment Coalition sent “mystery shoppers” to banks in the Washington area, they found that Black business owners had a harder time getting Paycheck Protection Program loans than their white counterparts.

Even though low unemployment rates were common across communities pre-pandemic, the data from the National Community Reinvestment Coalition shows it didn’t lead to broad economic prosperity in Worcester County.

Bank employees offered Black applicants less help with their PPP applications, a matched-pair study from the nonprofit National Community Reinvestment Coalition found.

The National Community Reinvestment Coalition, an organization that works to promote investment in underserved communities, said in July the federal government’s data was “so flawed it is virtually useless to assess if there was any bias in how the money was distributed or how much money went to specific communities.”

A 2018 study by the National Community Reinvestment Coalition, an organization focused on building wealth for underserved communities, found that three out of four neighborhoods that were historically redlined continue to struggle economically.

The National Community Reinvestment Coalition found that banks treated Black PPP borrowers significantly worse and offered different products 43% of the time compared to white borrowers with slightly weaker financials.

“This is very literally structural racism where it was built into the structure of American cities, into the housing structure and the neighborhood structure of American cities, and that’s something that persists over a very long time,” says Bruce Mitchell, a senior researcher with the National Community Reinvestment Coalition

National Community Reinvestment Coalition head Jesse Van Tol, whose organization is suing the OCC over its CRA rule, said the Fed “doesn’t appear to introduce new problems” through its approach, in contrast to its fellow regulator.

“Also unlike the OCC rule, which had something for everyone to hate, this proposal has something for everyone to like,” he added. “That’s not to say everyone will love where they’re headed, but for those who don’t love it, I expect it to go down like cough syrup as opposed to like a s— sandwich (the OCC rule).”

Today, gentrification disproportionately affects African Americans, as well as other minority groups in urban areas, in the effort to increase property values. According to a study done by the National Community Reinvestment Coalition, from 2000 to 2013, 20,000 African Americans were displaced from their homes in Washington, D.C.

To create the maps, HOLC examiners classified neighborhoods on a “perceived level of lending risk” based on information they gathered from local appraisers, bank loan officers, city officials, and real estate agents. According to the National Community Reinvestment Coalition, the examiners graded the neighborhoods based on factors such as:?? The age and condition of the housing, Access to transportation, The closeness of popular amenities such as parks, Proximity to undesirable properties such as polluting industries, The residents’ economic class and employment status, The residents’ ethnic and racial composition.