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Historic Overhaul Of Lending Equity and Community Reinvestment Act Rules Presents Crucial Opportunity To Heal National Divides

New proposed regulations to update enforcement, data collection and other aspects of the Community Reinvestment Act (CRA) offer a welcome and overdue opportunity to address the unacceptable and persistent wealth and opportunity divides that plague the world’s richest nation, the head of the National Community Reinvestment Coalition (NCRC) said Thursday.

“It has been 27 years since the government made a meaningful effort to keep Community Reinvestment Act rules up to date with the convulsions of technology, financial industry consolidation and other key changes to how Americans work and live,” said Jesse Van Tol, President and CEO of NCRC. “We’ve seen how much harm such lags can do as economic chasms of race and class have persisted and even expanded. We applaud regulators for their diligent and rigorous work on this proposal. We welcome the opportunity this interagency proposal offers to improve our financial system’s approach to our national inequality crisis, in consultation with community groups, lenders and everyday Americans.”

The jointly proposed regulatory overhaul touches upon the separate jurisdictions of the Federal Deposit Insurance Corporation, Federal Reserve and Office of the Comptroller of the Currency. This vast rulemaking effort marks the first significant update since 1995 to the 45-year-old CRA, Congress’s most comprehensive attempt to ensure all Americans in all communities can access safe, sound and fair financial services. CRA was intended to end discrimination known as redlining and to require banks to lend and invest in low- and moderate-income communities. NCRC will closely analyze the proposal in the coming days and then make recommendations for a final rule. Updates will be available at www.NCRC.org/treasureCRA.

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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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