Senate plan helps banks, not the economy

Washington, DC– Senate Banking Chairman Mike Crapo (R-Idaho) released the text of bipartisan bill S. 2155 ” Economic Growth” legislation, which rolls back valuable fair lending requirements and protections from the dangerous banking practices that led to the 2008 financial crisis.

“This legislation will grow economic inequality rather than our economy, as its name suggests” said John Taylor, President and CEO of the National Community Reinvestment Coalition. “In the midst of several financial scandals, politicians on both sides of the aisle have again proven that their allegiances to Wall Street far surpass their promises to Main Street.”

The bill is a major setback for enforcement of fair lending laws, it exempts 5,400 banks (85%) and 497 non-banks (48%) from having to provide better information to the public about their lending. This bill also weakens several Dodd Frank protections, including the Volcker Rule, enacted after the financial crisis to alert regulators and civil rights watchdogs to predatory banking practices. If this bill passes, policymakers and consumer rights groups will be left in the dark about the credit needs in underserved communities, where families have the most difficulty accessing mortgage credit.

“Allowing banks to circumvent these rules is an open invitation to resume risky business, for both individual customers and our entire financial system” said John Taylor.

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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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