Joint Statement On CRA Rule Changes From OCC

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A group of 18 civil rights, consumer protection and industry leaders issued the following joint statement:

Today, the Office of the Comptroller of the Currency (OCC) announced long-anticipated changes to rules that enforce the Community Reinvestment Act (CRA). The Federal Reserve Board decided not to join the proposed rule and has offered alternative approaches. The Federal Deposit Insurance Corporation (FDIC), which joined the OCC’s proposed rule, decided not to join the final rule released today.

In the middle of a pandemic that has been hardest on lower-income communities and communities of color, the OCC has rushed ahead and acted alone to reshape CRA rules for the nation’s largest banks – banks responsible for the lion’s share of CRA lending and investing across the country. While the OCC made some improvements from its earlier proposals, the agency decided to go against the majority of comments and stick with new, gaping loopholes that will allow banks to reduce their focus on lower-income borrowers and communities by inflating CRA ratings and by earning more credit for big loans and investments.

With the economic fallout continuing from COVID-19 and uncertainty looming for many communities traditionally underserved by the nation’s financial institutions, just about everyone who has a stake in CRA, including many bankers, urged the agencies to stop the rule-making process. Importantly, we urged them not to upend, and in fact strengthen, CRA incentives for banks to participate in an equitable recovery for these communities. The FDIC listened, the OCC didn’t. Instead, it moved alone and acknowledged that it went against the majority of public comments that did not support the proposed rule changes.

The new rules stick with an overly simplistic metrics system that creates a loophole for banks to exploit, allowing them to get a passing CRA rating by making investments in communities where they can reap the largest rewards, while leaving too many credit needs unmet for underserved consumers and neighborhoods.

The OCC has also fractured the interagency consensus around CRA enforcement, acting without the other two agencies that regulate banks and set rules for CRA compliance, the FDIC and Federal Reserve Board. This solo move by the OCC breaks what should be a uniform system for all lenders. Instead, the OCC has pressed ahead to force an even more complex and confusing experiment on low- and moderate-income families and communities of color in the middle of a crisis and at a time when the racial wealth gap has been widening.

This is not the way to reopen America and if the President of the United States is committed to an equitable recovery, he should immediately suspend this rule.

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This statement was issued jointly by the following organizations: 

Americans for Financial Reform Education Fund

Center for Responsible Lending

Consumer Action

Consumer Federation of America

Leadership Conference on Civil and Human Rights

NAACP

NAACP Legal Defense and Educational Fund, Inc (LDF)

National Alliance of Community Economic Development Associations (NACEDA)

National Association for Latino Community Asset Builders (NALCAB)

National Association of Real Estate Brokers (NAREB)

National CAPACD-National Coalition for Asian Pacific American Community Development

National Community Reinvestment Coalition (NCRC)

National Community Stabilization Trust

National Consumer Law Center

National Fair Housing Alliance

National Low Income Housing Coalition

Prosperity Now

UnidosUS

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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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