Roll Call, October 15, 2019: Rise Of Fintech Weakens Law To Prevent Lending Discrimination
“I think every bank is willing to make a profitable loan or take a person’s deposits from no matter where it is,” says Jesse Van Tol, CEO of the National Community Reinvestment Coalition, a finance-focused association of community groups. “The question is: What are they willing to invest back into those places?”
Van Tol says gutting the CRA of its geographic focus would run counter to its fundamental purpose of ensuring that banks are responsive to the communities they draw deposits from.
“The entire point of the CRA is to keep the banks accountable to community needs,” he says. “It is the goal of the CRA to ensure that banks … develop some local knowledge and expertise about what’s going on in that local community.”
For now, it’s unlikely the federal government will address the growing gap in CRA coverage.
By the National Community Reinvestment Coalition’s count, only 30% of mortgage lending falls under CRA obligations, and as more types of lending expand online, Van Tol worries that fewer small business loans will go to low- and moderate-income entrepreneurs.