American Banker: No shortage of ideas on CRA overhaul as official plan remains mystery

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.

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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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