#TreasureCRA

#itsOURmoney

#JustEconomy

• #TreasureCRA campaign hub: https://ncrc.org/treasureCRA/ 
• Principles for CRA reform: https://ncrc.org/principles-for-cra-regulatory-reform/
• Sign-on letter: https://ncrc.org/sign-on-letter-regarding-cra-regulatory-reform/
• #TreasureCRA press release: https://ncrc.org/with-rule-changes-looming-a-coalition-of-national-and-local-organizations-urges-bank-regulators-to-modernize-the-community-reinvestment-act/
• OCC ANPR press release: https://ncrc.org/occ-to-review-community-reinvestment-act-changes-could-impact-billions-in-loans-and-investments-annually/
• Sign up to join the campaign: https://ncrc.org/treasureCRA/

We need to modernize and strengthen CRA, not weaken it.

We will not be silent while others try to dismantle one of the landmark laws of the Civil Rights era.

The Trump Administration wants to dismantle all sorts of civil rights protections for minorities and communities of color. Now they’re talking about watering down rules that prevent discrimination in lending. We can’t allow this to happen. There is no good reason to make it easier for lenders to discriminate against credit-worthy borrowers. There’s still compelling evidence that discrimination remains a problem in many communities.

We support modernizing the law, and strengthening it. But discrepancies in lending to low- and moderate-income communities and people of color remain a problem in communities nationwide. Regulators should be working to set and enforce rules that solve that problem, not to making life easier for banks that are enjoying record profits.

The largest banks have retreated in lending to low- and moderate-income borrowers while 98 percent of banks pass their CRA exams. The law needs to be modernized and the rules and tests for compliance need to be strengthened, not weakened.

We have been fighting to strengthen and modernize the Community Reinvestment Act for over a decade. We must remain clear and consistent that the changes to CRA must not sacrifice the spirit and intent of the act – to increase access to capital, credit and basic banking services in underserved communities. We need CRA, and we need it strengthened and modernized to combat rising wealth inequality and place-based disparities in economic opportunity,.

Regulatory reform must invigorate CRA, not eviscerate it.

The Community Reinvestment Act was a landmark civil rights law passed in 1977 to end discrimination that was once common in America’s banking and housing markets. For decades, entire neighborhoods were excluded from lending to buy homes and build small businesses. Those were poor and working-class neighborhoods where minorities and immigrants lived. That practice was called redlining. It prevented millions of people from building personal wealth through home ownership and entrepreneurship.

The law made a huge difference. A trillion dollars or more went to low- and moderate-income neighborhoods that were once excluded from the American Dream.

But discrimination in lending is still a problem. We still need CRA, and neighborhoods still need lenders to live up to their obligations under the law.

• Banks earn billions in profits by investing our capital – and they have an obligation to reinvest that capital in the communities where it comes from. The government needs to hear from you: ncrc.org/treasurecra/#take-action
• Proposed changes will make it easier for banks to cherry pick where they lend, and where they don’t. Act now to let the government know that weakening the CRA will not be tolerated: ncrc.org/treasurecra/#take-action
• We need strong, meaningful enforcement of CRA to make sure banks meet the credit needs of the communities where they take deposits and do business. Submit your comment now: ncrc.org/treasurecra/#take-action
• We can’t allow banks to cherry-pick where they lend – and where they don’t lend at all. We can’t allow a simple fraction to substitute for investment in local communities, or to mask its absence. #TreasureCRA
• Since 1977, CRA has driven inclusion and equity in the financial markets, leveraging trillions of dollars in responsible loans, investments, and services for traditionally underserved communities. #TreasureCRA
• Reforming CRA must not become a pretext for relaxing CRA. #TreasureCRA
• CRA exams must retain a local geographical focus. #TreasureCRA
• Public participation is the heart and soul of CRA and must be safeguarded. #TreasureCRA
• To combat rising inequality and placed-based disparities in economic opportunity, we need a vital CRA. #TreasureCRA #JustEconomy
• Any changes to CRA should strengthen it and live up to the spirit and intent of the act – ensuring that low and moderate income communities and communities of color have equal access to capital and credit. #TreasureCRA
• Adjustments to CRA could help more Americans become home and business owners; or on the other hand, enable lenders to ignore entire neighborhoods.  #TreasureCRA #JustEconomy

• The largest banks received 2.5 billion from tax cuts in the last quarter, and now they want to walk away from working class and poor communities. In response, we are launching the #TreasureCRA campaign for fairness in banking. Now we need to rally, dig deep and flood the government with our comments. We need your voice and your network: ncrc.org/treasurecra/#take-action
• Tell the regulators: we will not stand by silently while others try to dismantle one of the landmark laws of the Civil Rights era. Join the #TreasureCRA campaign and submit your comment now: ncrc.org/treasurecra/#take-action
• Tell the government: we can’t allow banks to cherry-pick where they lend – and where they don’t lend at all. We can’t allow a simple fraction to substitute for investment in local communities, or to mask its absence. ncrc.org/treasurecra/#take-action
• CRA has been an essential tool to ensure banks meet the needs of the communities where they take deposits. But the proposed changes will make it easier for banks to cherry pick where they lend, and where they don’t. The time to act is now. We only have 60 short days to make an impact: ncrc.org/treasurecra/#take-action

Resolution To Protect The Community Reinvestment Act – To Ensure That Efforts To Modernize Regulations Do Not Undermine The Intent Of The Law

WHEREAS, the Community Reinvestment Act (CRA) was enacted on October 12, 1977 to end the practice of “redlining” by financial institutions where they would draw a red line on a map around the neighborhoods they did not want to offer financial services;  before the enactment of the CRA, redlining made it near impossible for low- and moderate-income Americans, racial and ethnic minorities, and their neighborhoods to access credit services, such as mortgages and business loans, regardless of their qualifications or creditworthiness; and

WHEREAS, CRA was a landmark civil rights law passed in 1977 to end discrimination that was once common in America’s banking and housing markets; and

WHEREAS, discrimination in lending is still a problem; and

WHEREAS, the CRA states that “regulated financial institutions have continuing and affirmative obligations to help meet the credit needs of the local communities in which they are chartered”; and

WHEREAS, the CRA establishes a regulatory regime for monitoring the level of lending, investments, and services in low- and moderate-income neighborhoods traditionally underserved by lending institutions; examiners from three federal agencies assess and “grade” a lending institution’s activities in low- and moderate-income neighborhoods; and

WHEREAS, the federal agencies conducting CRA examinations are: the Office of the Comptroller of the Currency (OCC), which examines nationally chartered banks and the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board – both of whom examine state-chartered banks; and

WHEREAS, if a regulatory agency finds a financial institution not serving these neighborhoods, it can delay or deny that institution’s request to merge with another lender or to open a branch or expand any of its other services; the financial institution regulatory agency can also approve the merger application subject to specific improvements in a bank’s lending or investment record in low- and moderate-income neighborhoods; and

WHEREAS, a financial institution’s CRA grade can be downgraded if a federal agency uncovers evidence of illegal, abusive or discriminatory lending on their fair lending exams that occur at about the same time as CRA exams; and

WHEREAS, since 1996, according to analysis of bank lending data by the National Community Reinvestment Coalition (NCRC), CRA-covered banks issued almost 29 million small business loans in low- and moderate-income tracts, totaling $1.156 trillion, and $1.179 trillion in community development loans that support affordable housing and economic development projects benefiting low- and moderate-income communities; and

WHEREAS, a 2016 review of the CRA examinations of intermediate small banks(ISBs)/mid-sized banks (banks with asset sizes today between $313 million and $1.252 billion) found that ISBs produced over $9.3 billion of community development (CD) loans and grants; and

WHEREAS, studies have found that CRA-covered home lending is safer and sounder than non-CRA covered lending; when a larger share of lending is issued by CRA-covered banks than by independent mortgage companies, a neighborhood experiences lower delinquency rates and less risky lending; and

WHEREAS, despite the tremendous benefits of CRA to communities, the full potential of CRA has not been realized because it has not been updated to take into account changes in the banking industry and the economy; independent mortgage companies not covered by CRA now make more than 50 percent of the home mortgage loans in America and financial technology companies (“Fintech”) not covered by CRA operating via the internet are rapidly increasing their lending; and

WHEREAS, notwithstanding the need to modernize CRA, we are concerned about ideas from some federal regulators that would substantially weaken the law; and

WHEREAS, geographic assessment areas must remain the focus of CRA exams for all banks; banks should continue to be graded based on every geography where they lend or receive a significant percentage of their deposits; banks cannot be allowed to cherry-pick where they lend – and where they don’t lend at all or to ignore the credit needs of distressed and vulnerable communities; and

WHEREAS, regulators review of a bank’s CRA commitment should not be consumed by an approach that is primarily driven by dollar amount. The OCC and FDIC propose a presumptive rating which would mainly consist of the dollar amount of a bank’s total CRA activities divided by the bank’s deposits. CRA was designed to encourage the financial system to meet the credit and capital needs of people with low and moderate incomes and small businesses who frequently have a need for relatively smaller sized loans. Moving to a dollar volume approach would encourage larger deals at the expense of underserved borrowers the law was designed to protect; and

WHEREAS, the OCC’s and FDIC’s proposal of January 2020 would also move CRA away from its focus on low- and moderate-income families and communities and count the financing of sports stadiums, middle-income rental housing, and financial education for middle- and upper-income consumers; and

WHEREAS, CRA should explicitly state the law’s obligation to fairly serve all races and ethnicities; banks that engage in large-scale illegal and harmful activities should fail their CRA exams.

WHEREAS, allowing banks to fail in half of the markets they take deposits from and still pass their CRA performance evaluations will allow banks to pick and choose where they proactively support the credit and capital needs of people with low- and moderate-incomes, and ignore them in other markets where they currently have an obligation; and

WHEREAS, the new proposed scoring system will radically devalue the importance of maintaining branches in neighborhoods with low- and moderate-incomes, despite strong evidence that branches are still heavily used by households with lower incomes; and

WHEREAS, proposal to give a multiplier of two to many ways that banks already finance community development for CRA credit, which is likely to lead to a reduction in actual community development financing; and

WHEREAS, basing new assessment areas off of physical addresses of depositors is problematic since this information is not currently collected, and if collected would likely not be shared with the public, leaving cities to guess whether a bank has an obligation to serve their community; and

THEREFORE BE IT RESOLVED, that the (organization’s name), will support efforts to modernize CRA, but not relax or undermine the law’s goal and intent; and

BE IT FURTHER RESOLVED, that the  (organization’s name), will oppose regulators efforts to raise bank thresholds and exempt more banks, such as ISBs/mid-sized banks, from examination of their community development lending and investments; and

BE IT FURTHER RESOLVED, that the (organization’s name), will support modernizing CRA to apply it to non-bank institutions including mortgage companies, financial technology companies, and credit unions; and

BE IT FURTHER RESOLVED, that the (organization’s name), will oppose regulators efforts to water down the penalties under CRA for discrimination; and

BE IT FURTHER RESOLVED, that the (organization’s name), will support a CRA with a clearly-defined grading system that emphasizes lending, bank branches, fair lending performance, and responsible loan products for working class families; and

BE IT FINALLY RESOLVED, that the (organization’s name), will support efforts to hold a bank accountable if it fails its CRA exam, or wishes to acquire a bank with a better CRA grade, and urge agencies to recognize and encourage community benefit agreements and efforts that motivate banks to make more loans, investments, and services available to traditionally underserved communities.

Respectfully submitted on _____,

We’re counting on these people and organizations.

• OCC: @USOCC
• Federal Reserve: @federalreserve
• FDIC: @FDICgov
• Treasury: @USTreasury
• Congressional Black Caucus: @OfficialCBC
• Maxine Waters: @RepMaxineWaters
• Sherrod Brown: @SenSherrodBrown @SherrodBrown
• Doug Jones: @DougJones
• Mark Warner: @MarkWarner
• Cory Booker: @CoryBooker ‏
• Jeff Merkley: @SenJeffMerkley
• Catherine Cortez Masto: @SenCortezMasto @CatherineForNV
• Elizabeth Warren: @SenWarren

Importance of local press

 While many local news outlets continue to struggle, some are holding on, continue to report on local issues and have attentive audiences focused on them. These local media providers can be an important channel to reach local audiences and leaders and an invaluable resource for community organizations trying to build momentum for a national law that seems at times more inside-the-beltway than community-focused. And for all the political games swirling around CRA reform right now – the people who will be most affected will be you and your neighbors. Let’s work together to get the word out – we will not let the CRA be gutted – and together we can start a new movement to further a just economy for all.  

There are several ways to get your point of view into local media:

• Contact a reporter and encourage them to write a news story about CRA
• Submit a guest column about CRA to an opinion section
• Send a letter to the editor about CRA
• Persuade an editorial board to write an editorial about CRA

How to reach out:

1. Determine what local and regional media are available to you – online, newspapers, magazines, TV, radio, blogs, podcasts, Facebook, LinkedIn and Meetup groups. Even NextDoor or local email lists might be an option. Determine if they cover topics that fall under CRA (banking, lending, housing, community development, economic development, community benefits…etc).
2. Find the appropriate reporter. It could be someone who covers local business and banking, or housing, development, urban renewal, poverty, discrimination or social services. Study their work. Find connections with your work.
3. Formulate your pitch. Send via email. Follow up by phone if you don’t get a response. Being able to put your face with your name will help you build the relationship. Attend press events or ask to meet up for coffee and make your pitch then.
4. Local reporters are busy, they don’t have a lot of time for coffee and conversation. When you get responses, be sure to respond asap.
5. If a reporter likes your pitch, be sure to help find sources and set up interviews, preferably with members of your organization and/or community.
6. Once published, be sure to share far and wide with your entire network, including with NCRC.

Sample Pitch:

Bank regulators in Washington have published new rules to change the Community Reinvestment Act, a law enacted in 1977 to get rid of discrimination that was once common in mortgage and small business lending by banks. Redlining was once widespread across America, and it happened here too. It kept capital out of neighborhoods where minorities and immigrants lived. CRA was passed to put a stop to that.

But discrimination in lending is still a problem. This law has a direct impact on [city / our community]. Our local banks make mortgage and small business loans, as well as grants to local nonprofits, in order to comply with the law. The proposed changes ould have a big impact here, especially on low- and moderate-income people. Would you be interested in writing about this issue and why it matters to our community? If so, I’d love to share more info with you.

Example Local Article:

New Orleans Needs a Stronger, Not a Weaker Community Reinvestment Act

 OpEd’s:

OpEd’s are another way to get local press coverage. Here you write an opinion piece and then shop it around to local papers and magazines. Most outlets have their own requirements, so be sure to check with them before you write and pitch your piece.

Suggested Content:

We suggest you start your OpEd off with local impacts. What has CRA done for your community in the past? How will the proposed changes halt these investments? And then you can use some of our talking points below to further bring home the point that these proposed changes are disastrous for our underserved communities.

All parties invested in the Community Reinvestment Act (CRA) – bankers, regulators, community leaders and watchdog groups – have agreed for some time that CRA was in need of modernization to reflect changes in how people access banking services today opposed to in 1977 when the act was first enacted. However, there is no doubt that the proposed changes from the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) would greatly diminish the effectiveness of the law and does a terrible job of addressing our mutual concerns. Instead, the agencies came up with ways for banks to do less for lower-income neighborhoods and borrowers, and a host of complex and confusing options.

When 98% of banks already pass their CRA exams, do we really need to make it easier for them? This is exactly what the rules proposed in December would do. It would even make it easier for banks to cherry-pick where they do business by reducing the importance of assessment areas. Banks would be able to invest outside of their assessment areas before they have met the needs within their assessment areas and still receive full credit on their CRA exams. They would also be able to completely ignore half of their assessment areas, because they only need to pass 50% of their CRA exams to receive an outstanding rating.

But that isn’t even the worst of it. With the one ratio metric, an overly simplistic measure that divides the dollar value of CRA activities by the bank’s total deposits, banks would likely favor larger loans and investments. Add in the fact that large infrastructure projects like bridges and sports stadiums in Opportunity Zones are worthy of CRA credit, and it is clear that these proposed changes do nothing short but encourage banks to reduce their lending to lower-income borrowers in lower-income neighborhoods, neighborhood-based nonprofit organizations, small business and home mortgages. Because what would you do if you had the choice between a high-dollar, high-return project or a bunch of small, low-return investments?  (note – if you have a large infrastructure project planned or in the works in your community, it would be good to highlight it here and show how it could skew community investments)

Banks are literally being told by the federal regulators to turn their backs on potentially millions of people whose deposits are the foundation of the banking business. A clear descent against the intent of the law.

And if those changes weren’t bad enough, the banking regulators took it even further. The definition of affordable housing would be expanded in a manner that will not ensure bank activities are actually going to LMI people. The small business revenue threshold for CRA credit would be increased from $1 million to $2 million, and up to $10 million for family farms, diluting the emphasis on revitalizing low-income communities and lending to the smallest businesses. And small banks with assets of less than $500 million could opt out of these new exam requirements and instead keep their current CRA examinations, which do not include any community development financing requirements.

Based on the Federal Reserve’s research into the financial impact of CRA, mortgage and small business lending in some LMI neighborhoods could drop by 20% over five years. That would result in a loss of $105 billion in loans. There is a reason the Federal Reserve did not sign on to this proposal.

There is no doubt that these changes would diminish the effectiveness of a law that was desperately needed when it was enacted and which remains essential to ensure banks meet the credit needs of all communities where they take deposits, not just the wealthy ones.

The regulators violate cardinal principles of rulemaking in terms of both fulfilling their statutory responsibilities under CRA and not proposing a rule based on clear and transparent data analysis. The FDIC and OCC need to discard the notice of proposed rulemaking and instead work with the Federal Reserve Board and propose an interagency rule that will augment the progress achieved under CRA in terms of reinvesting in LMI communities, not halting or reversing this progress.

OpEd Examples:

Here is an example of a recent OpEd Jesse Van Tol did in the New York Times, and three from our members:

A Green Light for Banks to Start ‘Redlining’ Again

Bank merger calls for community benefits agreement

Your View: Law promotes homeownership in poorer Lehigh Valley neighborhoods. Why weaken it?

https://www.sfchronicle.com/opinion/openforum/article/Save-the-Community-Reinvestment-Act-a-path-to-14960588.php

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