In the News

As Ed Gorman of the National Community Reinvestment Coalition pointed out not long ago, “CDFIs, just judged by the total capital being invested, are a remarkable success over the last 25 years, but I think everybody knows we could all do better.”

Experienced groups adept at applying the CRA in a positive way, such as the National Community Reinvestment Coalition, have objected to the proposed changes.

Income inequality linked to gun violence, but unequal distribution of resources isn’t an accident. According to a study published last year by the National Community Reinvestment Coalition, three out of four neighborhoods that were redlined in the United States decades ago continue to struggle economically.

A group of community reinvestment groups, including the National Community Reinvestment Coalition, said in a joint statement last week that the proposal “utterly fails to achieve what were supposed to be the primary objectives of rule changes: greater clarity for lenders and better results for low- and moderate-income communities and people of color.”

Additionally, the National Community Reinvestment Coalition’s recent study ranked DC as America’s most gentrified city, and commercial property owners are shifting property tax burden increases to tenants.

As the National Community Reinvestment Coalition noted in its comment letter, “[t]he lack of change implies that the NCUA is not keeping pace with the growing number of large credit unions and the changing dynamic of the industry that it regulates.” Once again, I couldn’t agree more.  

“Along with the banking industry, we and our members across the nation share the desire to modernize CRA,” Van Tol said in a statement. “However, the Trump administration seems determined to radically overhaul and water down the compliance system by introducing a numerical measure of performance that has been widely criticized, by bankers as well as community advocates, as overly simplistic.”

Between 2012 and 2017, banks spent an average of $78 billion a year on community development lending and $55 billion a year on small-business loans in low- and moderate-income neighborhoods that fall under the law, according to the National Community Reinvestment Coalition.

“The Trump administration seems determined to radically overhaul and water down the compliance system by introducing a numerical measure of performance that has been widely criticized, by bankers as well as community advocates, as overly simplistic,” said Jesse Van Tol, CEO of the National Community Reinvestment Coalition.

“This is a major transformation of the law. It upends how the CRA works,” said Jesse Van Tol, chief executive of the National Community Reinvestment Coalition.

“I’m very concerned that this proposal shifts the focus of CRA from making mortgage loans and small-business loans to lower-income people to a range of finance activities that are higher profit margin,” said Jesse Van Tol, the chief executive of the National Community Reinvestment Coalition, a nonprofit that seeks to help poor communities build wealth.

“The OCC’s approach to this has been to barrel in without building consensus first on how to proceed,” said Jesse Van Tol, CEO of the National Community Reinvestment Coalition. He raised the possibility that the FDIC’s support could be contingent on some kind of carve-out for smaller banks. “It will be telling if the FDIC signs on with a clause to let their banks opt out. Talk about a vote of confidence.”

Last year, the National Community Reinvestment Coalition released a report showing that neighborhoods singled out as hazardous by redlining are much more likely to struggle today than those that were not on the list.

More than half of low- and moderate-income older adults don’t have an adequate amount of short-term emergency savings, according to a recent report by the National Community Reinvestment Coalition.

A 2006 study from the National Community Reinvestment Coalition found that joint male and female borrowers “enjoyed more favorable outcomes than either male and female borrowers” on their own. What’s more, NCRC found that individual borrowers were more likely to end up in pricier subprime loans than joint borrowers.