Today, the National Community Reinvestment Coalition (NCRC), Rise Economy and 374 national partners, financial institutions, community organizations, local government agencies, religious groups and small business owners submitted a letter to the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) calling for a comment period extension for the new proposed Community Reinvestment Act (CRA) rule.
“We are still conducting our analysis of the proposed CRA rule changes, but so far all signs point to this being a disastrous proposal for all communities that rely heavily on banks for community investments and loans to fund affordable housing and economic development,” said Jesse Van Tol, NCRC’s president and CEO. “CRA is such a vital driver of community investment that the 60-day comment period is not sufficient time for all parties – from financial institutions to community organizations, state and local government agencies to individuals – to evaluate its impacts.”
“California community groups have serious concerns about what the proposed changes to the CRA rules will mean for BIPOC, low-income and tribal communities across our state,” said Paulina Gonzalez-Brito, CEO of Rise Economy. “Our initial analysis suggests these changes could put much-needed affordable housing financing at risk, weaken investment in community lenders, reduce transparency around small business lending and undermine the community organizations that are essential to stabilization and wealth building. Our communities and the public need more time to understand how these sweeping changes could affect the people and communities the CRA was created to serve. That opportunity was not provided by the regulators, and it is deeply concerning.”
The joint letter calls for extending the comment period for at least an additional 60 days for a full 120-day period.
According to NCRC’s preliminary analysis, the proposed CRA changes weaken bank obligations to invest, lend and provide services in low- and moderate-income (LMI) communities while reducing transparency and accountability.
“More specifically, we are concerned that proposed changes will lead to significant outcomes, including: less support for affordable housing via the Low Income Housing Tax Credit (LIHTC) and other community development activity, less transparency of small business lending, fewer community development loans and investments that support small businesses, fewer branches in LMI and rural communities, less access to affordable bank accounts and higher fees for unbanked and underbanked consumers, less capacity for community based organizations to play their critical role in supporting communities and the financial service ecosystem and less scrutiny of redlining and discrimination by banks,” the letter states.
For more information on the proposed CRA changes, visit www.ncrc.org/cra.
