Shelterforce, January 9, 2020: Redlining Would Be Relegalized by CRA Reform Proposal
Legalized redlining. That would be the result if a currently proposed rule to “modernize” the Community Reinvestment Act (CRA) is adopted by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC).
And it breaks my heart.
This rule would legalize, and even explicitly invite, redlining—and that is not an exaggeration. The rule offers banks an opportunity to receive an Outstanding rating while only serving 50 percent of their assessment areas. Permitting such behavior would bring us back to an era where financial institutions had the option to draw red lines around—and deny financial services to—poor neighborhoods and all neighborhoods of color. Except this time it’s worse because we understand, yet choose to ignore, history.
Though my heart is broken, and the levers of power are stacked against us, I am hopeful. The Federal Reserve may release its own version of a modernized CRA. Further, as we make rounds on the Hill and within the agencies, we often hear about the 1500 letters generated in response to last year’s Advanced Notice of Proposed Rulemaking (ANPR). As impressive as that is, I have no doubt the response to this stage of the process will be many times larger.
So write your comment (before the end of February). Ask community leaders, partners, friends, and family to do so as well.