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 Hill, led 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.