Next City, May 11, 2021, Illinois Will Now Grade Credit Unions and Mortgage Companies on Their Commitment to Fair Lending
The Community Reinvestment Act was born in Chicago.
“The federal CRA was inspired by a response to redlining and the systematic refusal of financial services to Black residents [in Chicago],” says Illinois State Senator Jacqueline Collins, who recently spearheaded the passage of legislation to strengthen anti-redlining rules in her state. Since 2003 she’s represented the district that includes the predominantly Black neighborhoods on the South Side of Chicago where she grew up and still lives today.
Only a few other states have their own CRA laws. Generally, state CRA laws and regulations hew closely to federal reinvestment policies and standards, but provide an extra layer of oversight. New York has one that applies to state-chartered banks. Connecticut’s CRA law extends to state-chartered credit unions. Massachusetts is the only other state with a CRA law that applies to state-chartered banks and credit unions as well as mortgage companies licensed to operate in the state.
Meanwhile, Federal Reserve Chairperson Jerome Powell recently voiced his support for expanding the federal CRA to all institutions that make consumer loans. “Like activities should have like regulation,” Powell said last week to the annual conference of the National Community Reinvestment Coalition, a nationwide network of community development and fair housing groups. It would take legislative action from Congress to do so.