E&E News: Anti-redlining law could soon account for climate change

E&E News, August 5, 2022, Anti-redlining law could soon account for climate change

“It’s really intended to redress a whole history of disinvestment,” said Jesse Van Tol, the president and CEO of the National Community Reinvestment Coalition, which advocates for lenders to invest more in low-income communities.

“The reinvestment part of CRA comes in because banks would take deposits from the community … [which] are a source of really low-cost funding for banks. But then they weren’t reinvesting those deposits by making loans in that community to people who live there,” he added.

Now regulators are working to modernize the CRA to be sure it’s as effective as possible. One of the major changes is to ensure that banks are reinvesting in low- and medium-income communities where they provide online financial services, not only where their headquarters and branches are located. The purpose of that change is to adapt to the recent rise in internet banking and a decline in bank branches.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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