Hartford Business Journal, March 9, 2020: New federal CRA proposal could mark return of redlining in Hartford
A few months ago the Trump Administration quietly rolled out a proposal, which, if enacted later this spring, could have a substantial and negative impact on cities like Hartford.
Back in the 1930s, the federal government graded neighborhoods in and around Hartford and more than 200 other metro areas based on their perceived investment risk.
Much of the government’s determination of a neighborhood’s respective risk rating was based on the race and ethnicity of residents in the community it was assessing. Neighborhoods where government appraisers detected an “infiltration of negroes” (their words, not mine), or which were occupied by other non-white residents were typically given the poorest rating and cut off from credit.
As a consequence, the flow of capital to such neighborhoods in Hartford was reduced to a trickle. Despite efforts by the federal government to address such discriminatory policies starting in the late ‘60s, I still see the subsequent effects of decades of disinvestment on my block and in my neighborhood every day.
For the last 40 years, the one silver lining for these communities has been the Community Reinvestment Act. As the result of CRA, banks have been required by their respective regulatory agencies to demonstrate that they’re not redlining, but actually investing in the low- and moderate-income communities where they operate.
According to the National Community Reinvestment Coalition, from 2009-2018 CRA qualified lending in Greater Hartford resulted in $8.2 billion in mortgages to LMI homeowners or in LMI neighborhoods, and $1.9 billion in small business loans in LMI neighborhoods.
