Nonprofit Quarterly: Community Reinvestment Act at Risk: What’s at Stake?

Nonprofit Quarterly, March 11, 2020: Community Reinvestment Act at Risk: What’s at Stake?

As Miriam Axel-Lute notes in Shelterforce, “The Community Reinvestment Act, or CRA, is so much a part of the landscape of community development that when it is not under threat we almost take its pivotal role for granted. Activists fighting against bank redlining got the landmark legislation passed in 1977.” The historic gains of over 40 years ago, however, are now under considerable threat.

The stakes are high. As Rick Cohen noted in NPQ in 2008, when the Community Reinvestment Action (CRA) was also under attack, “It is worth remembering that the enactment of the Community Reinvestment Act (and its data-gathering legislative companion, the Home Mortgage Disclosure Act) is one of the nonprofit sector’s biggest advocacy triumphs.”

According to the National Community Reinvestment Coalition (NCRC), the 25 largest banks alone generate about $35.6 billion per year in community development loans, equity investments, and grants.

As Axel-Lute acknowledges, the CRA is not perfect and could use updating. “It hasn’t shifted to represent online banking customer bases, or new kinds of financial institutions. It leaves out areas that are already suffering from being underbanked.” But while the changes proposed by the regulators would make modest improvements in some areas, these are swamped by the detrimental impact of the main thrust of the changes.

If your nonprofit wishes to weigh in, there is still time to do so. The original deadline of March 9th for comments has been extended until April 8th. A hashtag #TreasureCRA has also been set up by advocates seeking to defend the CRA.

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