American Banker, April 9, 2018: No shortage of ideas on CRA overhaul as official plan remains mystery
On Monday, at the National Community Reinvestment Coalition conference, participants of an event on the CRA reform effort dug into the need for a long view on modernizing enforcement of the 1977 law, how CRA can combat redlining, potential changes to banks’ assessment areas and developing a system to measure a bank’s CRA commitment.
The CRA was designed not only to outlaw redlining practices, but to affirmatively require lenders to make loans to those communities that lie within their geographical footprint, as defined by location of bank branches. But since the law was passed, banking transactions that used to be exclusively conducted in branches are now executed almost anywhere, making the tether between branch locations and business activity far more tenuous than it used to be.
Recent reports by the NCRC and the Center for Investigative Reporting have found that discriminatory practices in lending remain a potent obstacle for people of color, and many say the CRA should do a better job of preventing redlining.