Nextcity: Why you should still care about the Community Reinvestment Act

Nextcity, June 6, 2018: Why you should still care about the Community Reinvestment Act

Looking around at the biennial National Interagency Community Reinvestment Conference, held in Miami earlier this year, I noticed many of the attendees this year were much younger than me. I couldn’t help but wonder if this younger generation truly understood the industry prior to the Community Reinvestment Act and how far we have come since it passed in 1977. Perhaps they may understand the situation theoretically, but they have not experienced it firsthand, as I have.

As a young man at the beginning of my banking career, I interviewed with the president of a local bank for an officer training position. During the interview, I mentioned that I was interested in lending to communities that were predominantly African-American. Reflecting the time and social conditions, the president admitted that his bank did very little in this area, implying that it just didn’t make good business sense.

But, he added, hypothetically speaking, if the bank could be profitable in this endeavor, it would increase the bank’s competitive position in a new market while simultaneously improving the attractiveness and competitiveness of the entire community; it could be a win-win for all involved and therefore help eliminate the hypothetical redline that had been drawn around inner-city, minority-populated neighborhoods.

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