NCRC Endorses Rep. Maxine Waters Legislation To Overhaul Community Reinvestment Act

The National Community Reinvestment Coalition (NCRC) on Thursday endorsed robust new legislation from Congresswoman Maxine Waters to modernize and strengthen the Community Reinvestment Act (CRA).

“I applaud Chairwoman Waters’ work to overhaul CRA and add legislative heft to the Biden administration’s ongoing work to improve the law,” NCRC President and CEO Jesse Van Tol said. “This strong legislation from Chairwoman Waters deserves swift consideration and passage. Surely the past 45 years of continued inequities in lending, opportunity and wealth-building can convince the rest of our political leadership that the time for major legislative change has come.”

Chairwoman Waters’ bill – titled “Making Communities Stronger through the Community Reinvestment Act’’ – has several particular strengths that would broaden CRA’s reach, increase its rigor and improve its ability to address the racial inequities it was always intended to target since its initial drafting in the 1970s.

MORE RIGOROUS: The bill tightens collaboration between the bank agencies that lead CRA enforcement and the currently-separate anti-discrimination enforcement work done by peer agencies – and prompts that trio of bank regulators to slash points from CRA scores where there is evidence of discriminatory conduct, including business practices that displace and otherwise harm LMI communities.

The bill’s requirement of new biannual interagency studies of racial discrimination and disparities in access to credit is an important measure that will enable the regulators to respond to ongoing inequities. 

GREATER REACH: The bill wisely extends CRA scrutiny to activities previously neglected in CRA enforcement – including loans originated in partnership with non-depository institutions for small farms, mortgages, and other consumer loans – and requires evaluation of the terms of such lending, not just the amount of lender activity. 

It also requires regulators to take into account safe and sound small-dollar mortgage lending (for lower-cost homes), as well as mortgage lending done in partnership with minority- and women-owned institutions, credit unions and other smaller-scale financial institutions with closer ties to the communities CRA is meant to aid.

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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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