Nonprofit Quarterly, February 11, 2020: Proposed CRA Changes Threaten Access To Capital In Underserved Communities
Picture this: under the proposed regulations, a bank that invests in upgrading an athletic stadium located in a low- and moderate-income census tract, as long as it is in one of the Trump Administration’s “opportunity zones,” will get CRA credit.
Furthermore, banks have gotten increasingly sophisticated in designing initiatives, products, services and marketing campaigns that satisfy the federal regulators when examining CRA performance by the current regulatory standards. Today, over 98% of banks are given passing grades by their regulators.
The New York Times, in an editorial, calls this proposal a “partial demolition” rather than a modernization. The National Community Reinvestment Coalition (NCRC) believes that the winners would be the nation’s largest banks and the losers would be low-and moderate-income families, and underserved borrowers and communities.
