It's our money. Keep it in our neighborhoods.

We need a strong Community Reinvestment Act.

#TreasureCRA

CRA will be essential for COVID-19 economic recovery in the communities hardest hit by the pandemic.

The Community Reinvestment Act was passed in 1977 to end discrimination known as redlining.

It required banks to meet the credit needs of the communities where they do business. Discrimination in lending is still a problem. Yet some want to substantially weaken the law. We can’t allow that to happen.

LATEST

Current Situation

The Office of the Comptroller of the Currency in September 2021 proposed to fully rescind its controversial Trump-era rules and then work jointly with other banking regulators to adopt a clear, strong and consistent update to the rules. The previous rules were adopted by the OCC in 2020 despite widespread opposition and criticism from consumer, community and civil rights organizations, as well as many banks. They were also adopted without cooperation from the Federal Reserve Board and the FDIC.

Help us spread the word in your community. 

Use the tools on this page to reach your friends and local leaders.

See what is at risk in your community with this tool. Include these findings in a comment letter about the proposed rules.

WE NEED TO MODERNIZE CRA, NOT RELAX IT.

Take Action

Toolkit

Spread the word about CRA. Here are some things you can use.

  • Strengthening CRA is a critical component of a just recovery.
  • The Federal Reserve proposal must be strengthened to prevent grade inflation.
  • The Federal Reserve proposal should be strengthened to increase lending to people of color.
  • Assessment areas must support and reflect a commitment to local lending, investments and services.
  • The Fed ANPR provides an opportunity for the three banking agencies to come together to formulate a joint rule-making.
  • The Community Reinvestment Act (CRA) will be essential for COVID-19 economic recovery in the communities hardest hit by the pandemic.
  • Lower-income communities and communities of color have been the hardest hit by COVID-19. CRA will be essential for their economic recovery.
  • COVID-19 will drive neighborhoods deeper into poverty.
  • Any new rules should help lower-income communities and communities of color recover from COVID-19, and not make things worse for them.
  • CRA modernization must maintain its focus on lower-income communities and communities of color
  • CRA reform must include the collection of improved community development and deposit data
  • The hardest hit communities will be most in need of reinvestment after COVID-19.
  • As the nation’s LMI communities look to recover from COVID-19, the government should raise and definitely not lower the bar for bank reinvestment in LMI communities.
  • The OCC enacted new bank rules that will make recovery weaker, slower and more painful for lower-income communities and communities of color.
  • The OCC decided to go against the majority of public comments and introduce new, gaping loopholes that will allow banks to reduce their focus on lower-income borrowers and communities by inflating CRA ratings and by earning more credit for big loans and investments.
  • Some of the new OCC rules will take years to implement. But some are already in place and encourage banks to focus on bigger loans and investments rather than on smaller ones. The timing of that change couldn’t be worse, in the middle of a health and financial crisis that has been felt hardest in lower-income communities.
  • The new OCC rules are an obstacle to COVID-19 recovery. They discourage small dollar loans and don’t give sufficient credit for waiving fees, forbearances or loan modifications.
  • The timing of the new OCC rules isn’t just bad and tone-deaf in the middle of a health and financial crisis. It’s cruel and dangerous.
  • It was an absurd and intentionally cruel moment to weaken the Community Reinvestment Act.
  • Individuals, families and entire communities that are already suffering disproportionately from COVID-19 will be harmed if the OCC new rules are enforced.
  • Billions of dollars in bank loans, investments and philanthropy that should go to LMI neighborhoods to help with recovery could wind up going elsewhere.
  • The new OCC rules focus on the dollar value of bank CRA activities. Banks will seek the biggest deals, regardless of community needs for smaller home and small business loans.
  • These OCC changes are literally a plan to help banks do less for poor communitiesand communities of color.
  • CRA is supposed to make sure banks serve all the communities where they take deposits, not just the rich, White ones.
  • Almost nobody thinks the new OCC rules were a good idea.
  • Even most bankers don’t like the new OCC rules and they didn’t want to see these changes in the middle of a pandemic. COVID-19 is a crisis for them too.
  • The trade association representing most banks urged the OCC to stop its rule-making process until after the COVID-19 crisis has passed.
  • Three agencies regulate banks. They should work together to set CRA rules. But two of them, the Federal Reserve and the FDIC, did not sign on to the new rules from the OCC.
  • The OCC acknowledged an “overall mistrust in the OCC motivation and process.”
  • All three bank agencies should start over, work together and be in agreement on any plan to modernize CRA.
  • The current rules aren’t perfect, but they aren’t broken. The new OCC rules are a giant leap backwards at exactly the wrong moment.
  • The OCC took advantage of a nation in crisis to push through rule changes that will make recovery from the crisis more difficult.
  • Banks will be critical to local economies after COVID-19. So will the law that’s supposed to make sure banks serve their communities, the Community Reinvestment Act.
  • Any rule changes have to ensure that low- and moderate-income communities and communities of color have equal access to capital and credit.
  • Don’t let bank regulators use modernization as an excuse to weaken the law.
  • NCRC filed a lawsuit against the OCC for its violations of the Administrative Procedure Act with respect to both the way it handled the Community Reinvestment Act (CRA) rulemaking process and the arbitrary and capricious and otherwise unlawful content of the final rule. The case is pending in the U.S. District Court Northern District of California
  • NCRC’s campaign to stop the harmful OCC rule from going into effect resulted in a number of measurable improvements, but key aspects of the final rule are contrary to the intent and longstanding implementation of the CRA. These unlawful elements of the final rule will undermine the impact of the law at a time when community support is needed more than ever.
  • Read NCRC’s summary analysis of the OCC rules here: https://ncrc.org/summary-fact-sheet-on-the-occs-final-cra-rule/
  • The new rules significantly weaken the CRA obligation for banks and upend existing bank incentives to engage in a variety of lending, investing, affordable housing, small business and community revitalization efforts.
  • The OCC provided no analysis of how the proposal will impact LMI communities. It did not estimate how many new loans, investments, and services would be made in LMI communities. It also back-tracked on its thresholds for different ratings, admitting that it needs more data. This is not the way to finalize a rule that will affect neighborhoods across our country.
  • The new rules discourage or ignore the very activities needed most right now. – like innovative and responsive activities in response to COVID-19 that cannot be easily quantified, such as waiving fees, loan forbearance and modifications.
  • The proposal’s focus on dollar volume will drive banks to big deals and penalize banks that engage in microlending for small businesses, a product line that is set to have a dramatic increase in demand and impact because of COVID-19.
  • The new rules focus on the dollar volume of bank CRA activities. Banks will seek the biggest deals, regardless of community needs for smaller home and business loans. Why make several $50,000 home loans when a bank can finance a bridge connecting an interstate highway and get credit for financing in the hundreds of millions of dollars – and with questionable real-world benefit for lower-income communities.
  • Easy exams that discard looking at bank branches and bank accounts: After the final rule, 89 percent of OCC regulated banks will have no service test that looks at the number and percent of branches in low and moderate income tracts nor the bank’s record of opening and closing branches. OCC examiners will also not examine whether these banks are providing financial services such as  low cost checking accounts and savings accounts
  • Communities of color as an afterthought: In addition to LMI neighborhoods, banks should be examined for how they are lending, serving and (investing in) underserved neighborhoods that have high minority populations, low capital flows and had a history of redlining and are still suffering from the effect of it. While the Administration’s new CRA rules may identify some of these neighborhoods for banks, the Administration did not estimate how many communities of color would benefit from their changes. In addition,  they are not actively examining whether banks are lending, serving and investing in those communities today. The Administration declined to adopt a NCRC proposal which would have identified underserved tracts and which NCRC demonstrated would benefit a high percentage of predominantly minority census tracts.
  • While the country is reeling from the latest incidents of police brutality directed at African Americans, the Administration takes a passive approach to addressing racial inequality by allowing banks to get credit for activities in underserved communities of color, but making no additional requirements for these communities. NCRC’s approach acknowledges the urgency of racial inequality by requiring the banks to be regularly evaluated on their lending, investment, and services for communities of color.

#TreasureCRA

#itsOURmoney

#JustEconomy

  • More than 100 national and local civil rights, fair lending and consumer rights organizations have urged the Federal Reserve to strengthen the Community Reinvestment Act (CRA), a key anti-redlining and civil rights law. More: https://ncrc.org/civil-rights-fair-lending-and-consumer-rights-organizations-call-on-the-federal-reserve-to-strengthen-the-community-reinvestment-act/ #TreasureCRA
  • Civil Rights, Fair Lending And Consumer Rights Organizations Call On The Federal Reserve To Strengthen The Community Reinvestment Act Read more: https://ncrc.org/civil-rights-fair-lending-and-consumer-rights-organizations-call-on-the-federal-reserve-to-strengthen-the-community-reinvestment-act/
  • Strengthening CRA is a critical component of a just recovery and a #JustEconomy. #TreasureCRA
  • The @federalreserve proposal must be strengthened to prevent grade inflation. #TreasureCRA
  • The @federalreserve proposal should be strengthened to increase lending to people of color. #TreasureCRA
  • Assessment areas MUST support and reflect a commitment to local lending, investments and services. #TreasureCRA
  • The @federalreserve ANPR provides an opportunity for the three banking agencies to come together to formulate a joint rule-making. #TreasureCRA
  • Lower-income communities and communities of color have been the hardest hit by COVID-19. CRA will be essential for their economic recovery. #TreasureCRA
  • Low-income communities need more investment, not less. That’s why we need a strong CRA. #TreasureCRA
  • Banks will be critical to local economies after COVID-19. So will the law that’s supposed to make sure banks serve their communities, the Community Reinvestment Act. #TreasureCRA
  • The #CoronavirusPandemic has shown us that our neighbor’s healthcare is just as important as our own. This is why we need to do more to address systemic poverty in our country. One of the best ways to do that would be to #TreasureCRA. Here’s how: ncrc.org/treasurecra/  
  • Congress passed the Community Reinvestment Act as a direct response to decades of redlining and discriminatory lending. The @federalreserve proposal should be strengthened to increase lending to people of color. #TreasureCRA
  • The largest banks received 2.5 billion from tax cuts in the last quarter, and now they want to walk away from working class and poor communities. In response, we are launching the #TreasureCRA campaign for fairness in banking. Now we need to rally, dig deep and flood the government with our comments. We need your voice and your network: ncrc.org/treasurecra/#take-action
  • Tell the regulators: we will not stand by silently while others try to dismantle one of the landmark laws of the Civil Rights era. Join the #TreasureCRA campaign and submit your comment now: ncrc.org/treasurecra/#take-action
  • Tell the government: we can’t allow banks to cherry-pick where they lend – and where they don’t lend at all. We can’t allow a simple fraction to substitute for investment in local communities, or to mask its absence. ncrc.org/treasurecra/#take-action
  • CRA has been an essential tool to ensure banks meet the needs of the communities where they take deposits. But the proposed changes will make it easier for banks to cherry pick where they lend, and where they don’t. The time to act is now. We only have 60 short days to make an impact: ncrc.org/treasurecra/#take-action

Don’t strip ‘community’ out of a law that’s supposed to strengthen communities.

What We Want:

Geography must remain the focus of CRA exams for all banks. We want banks to be graded  based on every geography where they lend or receive a significant percentage of their deposits. Lending isn’t tied to bank branches the way it used to be. But branches are still essential for low- and moderate- income people. Geography still matters. Neighborhoods still matter.

What We Can’t Let Happen:

We can’t eliminate geographic assessment areas. We can’t allow banks to cherry-pick where they lend – and where they don’t lend at all. We can’t allow banks to ignore the credit needs of distressed and vulnerable communities. We can’t allow a reboot of redlining.

Protect communities of color with explicit language against racial discrimination.

What We Want:

We want new language explicitly stating the law’s obligation to fairly serve all races and ethnicities. Banks that engage in large-scale illegal and harmful activities should fail their CRA exams.

What We Can’t Let Happen:

In 2017, the Office of the Comptroller of the Currency (OCC) watered down the penalties for discrimination. We can’t allow regulators to allow banks to pass CRA exams if they discriminate.

Keep all lenders accountable.

What We Want:

We want the Community Reinvestment Act applied to all lenders, the same way it’s applied to traditional banks. The financial landscape has changed. Mortgage companies, credit unions, fintechs and other “nonbank” lenders now make the majority of the home loans in America.

What We Can’t Let Happen:

We can’t allow a majority of mortgage lenders to avoid CRA requirements. Banks and the Treasury Department have acknowledged that the financial landscape has changed, and that CRA should be updated to reflect the current marketplace and increase safe reinvestment in our communities.

Set a clearly-defined CRA grading system.

What We Want:

We want a clearly-defined grading system that emphasizes lending, branches, fair lending performance, and responsible loan products for working class families. We want each of these important aspects to get their due weight in analyzing a bank’s CRA performance. We do not support one ratio that lumps all of a bank’s activity together.

What We Can’t Let Happen:

We cannot allow a rating system that makes it easy for banks to pick the lowest hanging fruit and ignore critical community needs.

Don’t be afraid to let banks fail.

What We Want:

We need regulators unafraid to stand up to financial institutions. If a bank fails its CRA exam, or wishes to acquire a bank with a better CRA grade, agencies should recognize and encourage community benefit agreements. We want to motivate a race to the top across our financial industry.

What We Can’t Let Happen:

This spring, the OCC weakened its CRA enforcement by allowing banks with failed CRA ratings to merge, acquire, and grow their business. We cannot  allow regulators to adopt this policy. The “wink and nod” CRA exam has gone on long enough.

Read the rest of our principles for CRA reform.

Resolution To Protect The Community Reinvestment Act – To Ensure That Efforts To Modernize Regulations Do Not Undermine The Intent Of The Law

WHEREAS, the Community Reinvestment Act (CRA) was enacted on October 12, 1977 to end the practice of “redlining” by financial institutions where they would draw a red line on a map around the neighborhoods they did not want to offer financial services;  before the enactment of the CRA, redlining made it near impossible for low- and moderate-income Americans, racial and ethnic minorities, and their neighborhoods to access credit services, such as mortgages and business loans, regardless of their qualifications or creditworthiness; and

WHEREAS, CRA was a landmark civil rights law passed in 1977 to end discrimination that was once common in America’s banking and housing markets; and

WHEREAS, discrimination in lending is still a problem; and

WHEREAS, the CRA states that “regulated financial institutions have continuing and affirmative obligations to help meet the credit needs of the local communities in which they are chartered”; and

WHEREAS, the CRA establishes a regulatory regime for monitoring the level of lending, investments, and services in low- and moderate-income neighborhoods traditionally underserved by lending institutions; examiners from three federal agencies assess and “grade” a lending institution’s activities in low- and moderate-income neighborhoods; and

WHEREAS, the federal agencies conducting CRA examinations are: the Office of the Comptroller of the Currency (OCC), which examines nationally chartered banks and the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board – both of whom examine state-chartered banks; and

WHEREAS, if a regulatory agency finds a financial institution not serving these neighborhoods, it can delay or deny that institution’s request to merge with another lender or to open a branch or expand any of its other services; the financial institution regulatory agency can also approve the merger application subject to specific improvements in a bank’s lending or investment record in low- and moderate-income neighborhoods; and

WHEREAS, a financial institution’s CRA grade can be downgraded if a federal agency uncovers evidence of illegal, abusive or discriminatory lending on their fair lending exams that occur at about the same time as CRA exams; and

WHEREAS, since 1996, according to analysis of bank lending data by the National Community Reinvestment Coalition (NCRC), CRA-covered banks issued almost 29 million small business loans in low- and moderate-income tracts, totaling $1.156 trillion, and $1.179 trillion in community development loans that support affordable housing and economic development projects benefiting low- and moderate-income communities; and

WHEREAS, a 2016 review of the CRA examinations of intermediate small banks(ISBs)/mid-sized banks (banks with asset sizes today between $313 million and $1.252 billion) found that ISBs produced over $9.3 billion of community development (CD) loans and grants; and

WHEREAS, studies have found that CRA-covered home lending is safer and sounder than non-CRA covered lending; when a larger share of lending is issued by CRA-covered banks than by independent mortgage companies, a neighborhood experiences lower delinquency rates and less risky lending; and

WHEREAS, despite the tremendous benefits of CRA to communities, the full potential of CRA has not been realized because it has not been updated to take into account changes in the banking industry and the economy; independent mortgage companies not covered by CRA now make more than 50 percent of the home mortgage loans in America and financial technology companies (“Fintech”) not covered by CRA operating via the internet are rapidly increasing their lending; and

WHEREAS, notwithstanding the need to modernize CRA, we are concerned about ideas from some federal regulators that would substantially weaken the law; and

WHEREAS, geographic assessment areas must remain the focus of CRA exams for all banks; banks should continue to be graded based on every geography where they lend or receive a significant percentage of their deposits; banks cannot be allowed to cherry-pick where they lend – and where they don’t lend at all or to ignore the credit needs of distressed and vulnerable communities; and

WHEREAS, regulators review of a bank’s CRA commitment should not be consumed by an approach that is primarily driven by dollar amount. The OCC and FDIC propose a presumptive rating which would mainly consist of the dollar amount of a bank’s total CRA activities divided by the bank’s deposits. CRA was designed to encourage the financial system to meet the credit and capital needs of people with low and moderate incomes and small businesses who frequently have a need for relatively smaller sized loans. Moving to a dollar volume approach would encourage larger deals at the expense of underserved borrowers the law was designed to protect; and

WHEREAS, the OCC’s and FDIC’s proposal of January 2020 would also move CRA away from its focus on low- and moderate-income families and communities and count the financing of sports stadiums, middle-income rental housing, and financial education for middle- and upper-income consumers; and

WHEREAS, CRA should explicitly state the law’s obligation to fairly serve all races and ethnicities; banks that engage in large-scale illegal and harmful activities should fail their CRA exams.

WHEREAS, allowing banks to fail in half of the markets they take deposits from and still pass their CRA performance evaluations will allow banks to pick and choose where they proactively support the credit and capital needs of people with low- and moderate-incomes, and ignore them in other markets where they currently have an obligation; and

WHEREAS, the new proposed scoring system will radically devalue the importance of maintaining branches in neighborhoods with low- and moderate-incomes, despite strong evidence that branches are still heavily used by households with lower incomes; and

WHEREAS, proposal to give a multiplier of two to many ways that banks already finance community development for CRA credit, which is likely to lead to a reduction in actual community development financing; and

WHEREAS, basing new assessment areas off of physical addresses of depositors is problematic since this information is not currently collected, and if collected would likely not be shared with the public, leaving cities to guess whether a bank has an obligation to serve their community; and

THEREFORE BE IT RESOLVED, that the (organization’s name), will support efforts to modernize CRA, but not relax or undermine the law’s goal and intent; and

BE IT FURTHER RESOLVED, that the  (organization’s name), will oppose regulators efforts to raise bank thresholds and exempt more banks, such as ISBs/mid-sized banks, from examination of their community development lending and investments; and

BE IT FURTHER RESOLVED, that the (organization’s name), will support modernizing CRA to apply it to non-bank institutions including mortgage companies, financial technology companies, and credit unions; and

BE IT FURTHER RESOLVED, that the (organization’s name), will oppose regulators efforts to water down the penalties under CRA for discrimination; and

BE IT FURTHER RESOLVED, that the (organization’s name), will support a CRA with a clearly-defined grading system that emphasizes lending, bank branches, fair lending performance, and responsible loan products for working class families; and

BE IT FINALLY RESOLVED, that the (organization’s name), will support efforts to hold a bank accountable if it fails its CRA exam, or wishes to acquire a bank with a better CRA grade, and urge agencies to recognize and encourage community benefit agreements and efforts that motivate banks to make more loans, investments, and services available to traditionally underserved communities.

Respectfully submitted on _____,

cra image
(Click on the image to download)

We’re counting on these people and organizations.

Importance of local press

 While many local news outlets continue to struggle, some are holding on, continue to report on local issues and have attentive audiences focused on them. These local media providers can be an important channel to reach local audiences and leaders and an invaluable resource for community organizations trying to build momentum for a national law that seems at times more inside-the-beltway than community-focused. And for all the political games swirling around CRA reform right now – the people who will be most affected will be you and your neighbors. Let’s work together to get the word out – we will not let the CRA be gutted – and together we can start a new movement to further a just economy for all.  

There are several ways to get your point of view into local media:

  • Contact a reporter and encourage them to write a news story about CRA
  • Submit a guest column about CRA to an opinion section
  • Send a letter to the editor about CRA
  • Persuade an editorial board to write an editorial about CRA

How to reach out:

  1. Determine what local and regional media are available to you – online, newspapers, magazines, TV, radio, blogs, podcasts, Facebook, LinkedIn and Meetup groups. Even NextDoor or local email lists might be an option. Determine if they cover topics that fall under CRA (banking, lending, housing, community development, economic development, community benefits…etc).
  2. Find the appropriate reporter. It could be someone who covers local business and banking, or housing, development, urban renewal, poverty, discrimination or social services. Study their work. Find connections with your work.
  3. Formulate your pitch. Send via email. Follow up by phone if you don’t get a response. Being able to put your face with your name will help you build the relationship. Attend press events or ask to meet up for coffee and make your pitch then.
  4. Local reporters are busy, they don’t have a lot of time for coffee and conversation. When you get responses, be sure to respond asap.
  5. If a reporter likes your pitch, be sure to help find sources and set up interviews, preferably with members of your organization and/or community.
  6. Once published, be sure to share far and wide with your entire network, including with NCRC.

Sample Pitch:

Bank regulators in Washington have published new rules to change the Community Reinvestment Act, a law enacted in 1977 to get rid of discrimination that was once common in mortgage and small business lending by banks. Redlining was once widespread across America, and it happened here too. It kept capital out of neighborhoods where minorities and immigrants lived. CRA was passed to put a stop to that.

But discrimination in lending is still a problem. This law has a direct impact on [city / our community]. Our local banks make mortgage and small business loans, as well as grants to local nonprofits, in order to comply with the law. The proposed changes ould have a big impact here, especially on low- and moderate-income people. Would you be interested in writing about this issue and why it matters to our community? If so, I’d love to share more info with you.

Example Local Article:

New Orleans Needs a Stronger, Not a Weaker Community Reinvestment Act

 OpEd’s:

OpEd’s are another way to get local press coverage. Here you write an opinion piece and then shop it around to local papers and magazines. Most outlets have their own requirements, so be sure to check with them before you write and pitch your piece.

Suggested Content:

We suggest you start your OpEd off with local impacts. What has CRA done for your community in the past? How will the proposed changes halt these investments? And then you can use some of our talking points below to further bring home the point that these proposed changes are disastrous for our underserved communities.

All parties invested in the Community Reinvestment Act (CRA) – bankers, regulators, community leaders and watchdog groups – have agreed for some time that CRA was in need of modernization to reflect changes in how people access banking services today opposed to in 1977 when the act was first enacted. However, there is no doubt that the proposed changes from the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) would greatly diminish the effectiveness of the law and does a terrible job of addressing our mutual concerns. Instead, the agencies came up with ways for banks to do less for lower-income neighborhoods and borrowers, and a host of complex and confusing options.

When 98% of banks already pass their CRA exams, do we really need to make it easier for them? This is exactly what the rules proposed in December would do. It would even make it easier for banks to cherry-pick where they do business by reducing the importance of assessment areas. Banks would be able to invest outside of their assessment areas before they have met the needs within their assessment areas and still receive full credit on their CRA exams. They would also be able to completely ignore half of their assessment areas, because they only need to pass 50% of their CRA exams to receive an outstanding rating.

But that isn’t even the worst of it. With the one ratio metric, an overly simplistic measure that divides the dollar value of CRA activities by the bank’s total deposits, banks would likely favor larger loans and investments. Add in the fact that large infrastructure projects like bridges and sports stadiums in Opportunity Zones are worthy of CRA credit, and it is clear that these proposed changes do nothing short but encourage banks to reduce their lending to lower-income borrowers in lower-income neighborhoods, neighborhood-based nonprofit organizations, small business and home mortgages. Because what would you do if you had the choice between a high-dollar, high-return project or a bunch of small, low-return investments?  (note – if you have a large infrastructure project planned or in the works in your community, it would be good to highlight it here and show how it could skew community investments)

Banks are literally being told by the federal regulators to turn their backs on potentially millions of people whose deposits are the foundation of the banking business. A clear descent against the intent of the law.

And if those changes weren’t bad enough, the banking regulators took it even further. The definition of affordable housing would be expanded in a manner that will not ensure bank activities are actually going to LMI people. The small business revenue threshold for CRA credit would be increased from $1 million to $2 million, and up to $10 million for family farms, diluting the emphasis on revitalizing low-income communities and lending to the smallest businesses. And small banks with assets of less than $500 million could opt out of these new exam requirements and instead keep their current CRA examinations, which do not include any community development financing requirements.

Based on the Federal Reserve’s research into the financial impact of CRA, mortgage and small business lending in some LMI neighborhoods could drop by 20% over five years. That would result in a loss of $105 billion in loans. There is a reason the Federal Reserve did not sign on to this proposal.

There is no doubt that these changes would diminish the effectiveness of a law that was desperately needed when it was enacted and which remains essential to ensure banks meet the credit needs of all communities where they take deposits, not just the wealthy ones.

The regulators violate cardinal principles of rulemaking in terms of both fulfilling their statutory responsibilities under CRA and not proposing a rule based on clear and transparent data analysis. The FDIC and OCC need to discard the notice of proposed rulemaking and instead work with the Federal Reserve Board and propose an interagency rule that will augment the progress achieved under CRA in terms of reinvesting in LMI communities, not halting or reversing this progress.

OpEd Examples:

Here is an example of a recent OpEd Jesse Van Tol did in the New York Times, and three from our members:

A Green Light for Banks to Start ‘Redlining’ Again

Bank merger calls for community benefits agreement

Your View: Law promotes homeownership in poorer Lehigh Valley neighborhoods. Why weaken it?

https://www.sfchronicle.com/opinion/openforum/article/Save-the-Community-Reinvestment-Act-a-path-to-14960588.php

 

 

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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

Complete the form to download the full report: