NCRC

Critics argue the proposed changes will weaken protections against housing discrimination.

The proposed rules weaken a compliance system that needs to be strengthened, introduce new loopholes and add confusion and inconsistency, all while failing to address the real changes needed to modernize CRA to respond to changes in our country’s demographics and changes in the structure of the banking industry.

Credit unions are not just institutions, but dream fulfillment engines that lead to a first car, home or financing higher education aspirations. For this reason, public and policy makers should continue to recognize the value that credit unions provide.

The CRA remains the federal government’s most visible statutory tool for making financial institutions take account of their impact on poorer communities. Given the persistent wealth gap between Whites and people of color — a gap arising in part from discriminatory federal policies — the 1977 law’s purpose remains all too relevant.

CRA modernization is overdue and needs to be done so banks and communities get the clarity and flexibility they need to ensure they have maximum positive impact. But no modernization effort is worth gutting the central purpose of CRA – constructive reinvestment in the communities that need it most, where most of us live and work.

Community groups argue that if Otting gets his way, there will be more focus on how much banks spent on CRA-qualifying activities, as opposed to the quality of the investment and whether or not it would directly benefit low-income residents.

“I remember driving into Chicago from the east (coast), and it is just miles of Black neighborhoods,” Taylor recounted. “You go for miles when you live on the South Side without seeing White people, and when you do, you’re like ‘What are you doing here? Why are you here? What’s going on?’ And I wanted to understand why and how that happened.”

“For decades, economists had this view that burdens could quote-‘help’ separate out those that are what one calls truly disadvantaged versus those who might be more marginally needy,” said Hilary Hoynes, a professor of public policy and economics at the University of California, Berkeley. “Our current research suggests it could be exactly the opposite.”

Sauntore Thomas is reeling from a one-two punch. First, the Detroiter sued his employer alleging racial discrimination in a lawsuit that settled confidentially. Then he went to the bank this week to cash his settlement checks, but the Livonia bank refused to cash or deposit his checks.

The OCC charged five former Wells Fargo consumer banking and compliance officials with violating federal bank regulations and will seek to permanently ban them from the banking industry.

Regulators are arguing over the right metrics to use in crediting banks with CRA lending. But they are failing to ask the more fundamental question of whether increased debt is really the right way to help financially vulnerable families.

Ultimately, the lack of affordable housing across much of the country is a problem from which America can only build its way out. A functioning housing market where supply is allowed to meet demand is still a ways off.