The Greenlining Institute: CRA “reform” is an attack on communities of color

The Greenlining Institute, February 27, 2018: CRA “reform” is an attack on communities of color

CRA, a civil rights law passed by Congress in 1977 to address redlining, is reportedly next on the administration’s hit list. The effects of redlining — the refusal of banks to lend and invest in communities of color and low-income areas for decades – linger today. By enacting the CRA, Congress acknowledged that redlining was a pernicious problem that required long-term corrective actions: a mandate that banks lend to the working class, and that regulators evaluate banks for compliance.

Forty-one years later, the Trump administration’s pledge of a major revision to the CRA means they plan to weaken the law as part of the administration’s broad hostility to regulations that protect working people and consumers. Expect so-called regulatory “reform” to remove the incentive for powerful bank investments into low-income communities and communities of color.

Harmful proposals on the table include changing how banks are rated on their CRA exams and whether community development activity should include loans and investments to businesses and infrastructure projects in wealthy areas, as opposed to only low-to-moderate income areas, as was originally intended.

At a time of record profits for banks and record wealth and income inequality in the U.S., a strong CRA is critical to reaching economic equity for the working class and people of color.

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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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