A group of 487 civil rights, fair lending, community, and consumer rights organizations today submitted to bank regulators a set of recommendations for strengthening the Community Reinvestment Act (CRA), a law designed to stop discrimination in mortgage and small business lending.
In 1977, Congress enacted the Community Reinvestment Act (CRA) and required federal bank agencies to assess the record of banks in meeting needs for credit and banking services in communities in which banks are chartered. The federal bank agencies responded by creating CRA examinations that assessed banks’ performance in geographical areas containing bank branches and […]
A newly revealed suggestion to revamp a basic concept in the Community Reinvestment Act could undermine long-standing attempts to minimize redlining and improve needed investment in minority and low-income communities.
Many of Treasury’s recommendations for modernizing the Community Reinvestment Act would help financial institutions, not low-income communities.
Let’s discuss the specifics of what modernization could look like, since the Treasury report chose not to.
Critics argue that Community Reinvestment Act standards need to be more transparent, but creating more objective measures would require regulators to favor some types of loans over other
Fair-lending enforcement would not happen in earnest until years after the Fair Housing Act, not until the Community Reinvestment Act of 1977 required financial institutions go on record about what they considered their market area. The law intentionally created a conundrum for any institution that was redlining: How could it accept deposits from customers to whom it was unwilling to lend?
Bank regulators have not even proposed a plan yet for overhauling the Community Reinvestment Act, but stakeholders likely to weigh in on the plan are already establishing battle lines.
Here’s what the Treasury Department’s changes would do, and wouldn’t, toward solving four major problems we have outlined in our investigation.
The report “addressed what we have for a long time talked about with assessment areas. We think that is a step in the right direction,” said John Taylor, President and CEO of NCRC. But Taylor wanted to make sure that regulators do not lose sight of the importance of branch locations if they expand the assessments to other areas.