Politico: Fed aims to lay groundwork for interagency CRA overhaul

Politico, September 23, 2020: Fed aims to lay groundwork for interagency CRA overhaul

The Federal Reserve will take a different approach to reworking the Community Reinvestment Act (CRA) than the Office of the Comptroller of the Currency (OCC) did in early May.

The Federal Reserve board voted unanimously Monday to request input on a framework to overhaul the Community Reinvestment Act with the goal of building the foundation for a multi-agency approach to the anti-redlining law.

The Fed’s advance notice of proposed rulemaking, intended as a prologue to a formal proposal, comes on the heels of a CRA regulation finalized by the Office of the Comptroller of the Currency in May, which garnered opposition from community groups and Democrats, as well as skepticism from banks.

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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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