In the News

Keys to wealth building include access to credit and capital. Where big banks underserve minority communities, Black-owned banks can step in to help.

A joint statement from the National Community Reinvestment Coalition and several consumer protection and civil rights organizations said the OCC’s rule included “gaping loopholes” and included an “overly simplistic metrics system” that would allow banks to meet CRA requirements “while leaving too many credit needs unmet for underserved consumers and neighborhoods.”

First Merchants recently announced a $1.4 billion community investment plan with the National Community Reinvestment Coalition (NCRC) and its community-based members and partners. The commitment, which extends through 2025, includes mortgage and small business lending as well as community development investments.

The Senate is unlikely to pass the CRA on CRA, an amusing convergence of acronyms, but community groups including the National Community Reinvestment Coalition are also suing the OCC over the rule.

“As the COVID-19 pandemic continues to spread across the United States, slowing efforts to reopen the economy in many communities, it is critical that the federal government provide the necessary support for families and individuals worried if they will be able to stay in their homes,” said Jesse Van Tol, CEO of the National Community Reinvestment Coalition (www.ncrc.org).

A 2019 study from the National Community Reinvestment Coalition showed about 40 percent of Washington’s low-income neighborhoods experienced gentrification from 2000 to 2013, representing the greatest “intensity of gentrification” of any city in the country.

A joint statement from the National Community Reinvestment Coalition and several consumer protection and civil rights organizations said the OCC’s rule included “gaping loopholes” and included an “overly simplistic metrics system” that would allow banks to meet CRA requirements “while leaving too many credit needs unmet for underserved consumers and neighborhoods.”

“Part of their overall function as a government agency is to promote minority entrepreneurship. You’d think under all their programs they’d want to know the basic demography of their borrowers,” said Bruce Mitchell, a senior research analyst at the National Community Reinvestment Coalition.

The impacts of the COVID-19 pandemic have exacerbated the concentration of wealth in the United States, and emergency measures as well as structural change are urgently needed to address the widening racial wealth gap, a report from Inequality.org, a project of the Institute for Policy Studies, and the National Community Reinvestment Coalition, argues.

Even if the joint resolution dies in the Senate as expected, the rule change won’t be completely in the clear: The National Community Reinvestment Coalition is suing to block it, saying the OCC didn’t provide enough consideration to public feedback.

“This commitment provides (the bank) an opportunity to increase its Community Reinvestment Act activity, and to redirect it to where it is needed most,” said Jesse Van Tol, NRCR CEO. “This is how the (act) should work.”

According to a 2018 study by the National Community Reinvestment Coalition, the economic and racial segregation caused by redlining persists today: 74% of the neighborhoods the federal government deemed “hazardous” to lend to nearly a century ago are low to moderate income today, and 64% of them are minority neighborhoods.

A “mystery shopper” test at 32 bank branches in Los Angeles, carried out by the National Community Reinvestment Coalition, a membership organisation for small businesses, found white customers were given subtly better customer service—for example, being told more about available products and their costs. Black applicants were asked to provide more information.

The National Community Reinvestment Coalition (NCRC), found a racial disparity and bias in small business lending from banks in their 2008–2016 study, leaving minority business owners more vulnerable to the already economically devastating pandemic by having less access to credit and funding.

The National Community Reinvestment Coalition (NCRC) and the California Reinvestment Coalition (CRC) filed a lawsuit against the Office of the Comptroller of the Currency (OCC) on Thursday over its revamp of the Community Reinvestment Act (CRA), a 1977 anti-redlining law that governs lending in low-income neighborhoods.