Reveal: Does the Trump administration’s plan to modernize anti-blight laws stack up?

Reveal, April 4, 2018: Does the Trump administration’s plan to modernize anti-blight laws stack up?

The Treasury Department on Monday released its plan to “modernize and improve” the Community Reinvestment Act, a 41-year-old law designed to fight the historic effects of government-sponsored lending discrimination.

The move marks the first time the Trump administration has outlined its vision to address lending disparities impacting poor and working class neighborhoods. The much-anticipated, 35-page report was the result of more than 80 meetings with academics, advocacy groups, banks and trade associations.

“Forty years since the passage of CRA, it is time for modernization to fit today’s banking landscape and community needs,” Treasury Secretary Steve Mnuchin said in a statement. The recommendations, he added, are designed to increase “the ability of banks to deliver services in the communities they serve while considering technological advances in the financial industry.”

The Treasury’s recommendations come amid an uptick in scrutiny of the community lending law, following a February report by Reveal from The Center for Investigative Reporting that exposed a troubling pattern of home mortgage denials to people of color in cities across the country.  And yet, Reveal also found 99 percent of national banks had received a “satisfactory” or “outstanding” grade on Community Reinvestment Act inspections performed by federal regulators.

The report sparked controversy on Capitol Hillled to investigations from five states attorneys general and a public hearing in Philadelphia, where we centered our investigation.

If adopted, here’s what the Treasury Department’s changes would do, and wouldn’t, toward solving four of the major problems we have outlined so far in our ongoing investigation.

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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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