WASHINGTON, D.C. – A group of 487 civil rights, fair lending, community, and consumer rights organizations today submitted to bank regulators a set of recommendations for strengthening the Community Reinvestment Act (CRA), a law designed to stop discrimination in mortgage and small business lending.
The recommendations, based on principles developed by the National Community Reinvestment Coalition (NCRC), were submitted in a joint letter to the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC). The letter comes ahead of a proposal for new CRA rules expected to be announced soon by the OCC.
Comptroller of the Currency Joseph M. Otting today discussed his priorities for the agency and the federal banking system during testimony before the House Financial Services Committee.
“Reforming CRA must not become a pretext for relaxing CRA,” the groups said in their joint letter. “If the regulatory agencies contradict or contravene these principles, we will oppose the reform efforts.”
Among other things, the letter urged regulators to maintain a focus on low- and moderate-income borrowers and neighborhoods, lending in geographic communities, the value of physical bank branches, public participation in reviewing bank compliance with the law, and penalties for discrimination or violations of consumer protection laws.
“We’re concerned the OCC wants to water down the rules it sets to enforce compliance with the law,” said Jesse Van Tol, CEO of the National Community Reinvestment Coalition. “We support modernizing the law, and strengthening it. But discrepancies in lending to low- and moderate-income communities and people of color remain a problem in communities nationwide. Regulators should be working to set and enforce rules that solve that problem, not to making life easier for banks that are enjoying record profits.
“The largest banks have retreated in lending to low- and moderate-income borrowers while 98 percent of banks pass their CRA exams,” Van Tol said. “The law needs to be modernized and the rules and tests for compliance need to be strengthened, not weakened.
“We’re eager to work with the agencies, Congress, banks and the entire financial sector to modernize the law. But our coalition will not stand by silently while others try to dismantle one of the landmark laws of the Civil Rights era.”
View the joint letter: https://ncrc.org/sign-on-letter-regarding-cra-regulatory-reform/
View NCRC’s principles for CRA regulatory reform: https://ncrc.org/principles-for-cra-regulatory-reform/
