Opportunity Finance Network: Weigh in on the Future of the Community Reinvestment Act

Opportunity Finance Network, February 10, 2020: Weigh in on the future of the Community Reinvestment Act

OFN has concluded that the performance evaluation framework outlined in the NPRM would weaken the banking industry’s requirements to serve low-wealth markets in significant ways. By relying heavily on a dollar-volume ratio to determine a bank’s CRA rating, the proposed changes could result in banks making fewer mortgage and small business loans in low- and moderate-income (LMI) communities, as well as less financing for critical community development activities. This flaw in the performance evaluation design is so fundamental that it outweighs any other positive changes included in the NPRM.

OFN has not arrived at this conclusion without careful study and extensive consultation with CDFI leaders, allies and bank partners. Whether you incorporate OFN’s recommendations into your comment letter or submit different views, please make your voice heard by the March 9 deadline.

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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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