National and local organizations unify behind a strong Community Reinvestment Act

More than 500 national and local civil rights, fair lending and consumer rights organizations jointly urged the Trump administration to modernize and strengthen the Community Reinvestment Act (CRA), and to step away from ideas that would weaken it.

The organizations signed a joint comment submitted by the National Community Reinvestment Coalition (NCRC) to the Office of the Comptroller of the Currency (OCC), one of the government agencies that sets the rules banks must follow to comply with the law.

The OCC announced in August that it is considering changes to its CRA rules. Those changes could reduce lending in poor neighborhoods by billions of dollars annually. The 75-day period for the public to respond to the OCC’s ideas ended Monday. The OCC received at least 1,284 comments, according to regulations.gov, the government’s web site for gathering public comments.

“The comments from our coalition members, from other organizations, members of the public and even from many banks show broad support for the intent and purpose of the law, which is to make sure banks serve their communities,” said Jesse Van Tol, CEO of the National Community Reinvestment Coalition. “Neighborhoods that were intentionally neglected by banks for decades are still economically struggling. Any changes to CRA rules should lead to better results for those communities. Anything short of that is a step backwards.”

The law was passed in 1977 to end discrimination and “redlining” of entire neighborhoods that was once common in America’s banking and housing markets. It requires banks to make loans in all communities where they are chartered to do business.

“Discrepancies in lending to lower-income communities and towards people of color are happening at unacceptable rates nationwide,” Van Tol said. “Regulators should be working to set and enforce rules that solve that problem, not to making life easier for banks that are already enjoying record profits.”

The Comptroller of the Currency, Joseph M. Otting, said at a gathering of bankers in October that revising the Community Reinvestment Act was  “the number one reason” he came to Washington, DC. Before joining the Trump administration as head of the OCC, Otting was CEO of a bank, OneWest.

“In my forty-plus years doing this work, I have never seen grassroots groups beating out banks on the federal commenting process like this,” said John Taylor, the President and Founder of NCRC. “Local power showed up in full force because everything is on the table. We are terrified of what we might lose, and hopeful about all we can still win.”

In their joint comment submitted by NCRC today, local and national organizations opposed the OCC’s idea for a single metric that might be used to measure CRA compliance.

“Any CRA reform effort needs to tread carefully and build upon CRA’s successes in addressing redlining in communities of color and in lower-income communities,” their comment letter said. “If the regulatory agencies contradict or contravene these protections for our neighborhoods, we will oppose their reform efforts.”

They urged the OCC to modernize and strengthen the law, not weaken it.

Several banks, including the American Bankers Association also expressed doubts about the OCC’s “one ratio” idea.

“Peoples Bank has great concerned about the proposed metric. We believe the “single ratio metric” is too simplistic and could result in harm to our banks and communities,” wrote People’s Bank of Mississippi in their comment to the OCC.

What comes next remains to be seen. The OCC must review public comments before it issues any proposal for new rules – and that would be followed by another public comment period. Two other agencies, the Federal Reserve and the Federal Deposit Insurance Corporation, set and enforce CRA rules for some banks. They will also review the comments submitted to the OCC.

Joint comment letter:

Sign on letter for CRA ANPR:

NCRC Detailed Comment:

Our New York Times opinion:

Our “10 bad ideas” for CRA reform:

Our TreasureCRA hub:

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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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