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It's our money. Keep it in our neighborhoods.

We need a strong Community Reinvestment Act.

#TreasureCRA

CRA will be essential for COVID-19 economic recovery in the communities hardest hit by the pandemic.

Current Situation

Public comments on a notice of proposed rulemaking from federal banking agencies were due Aug. 5, 2022. The agencies are now reviewing thousands of public comments on how best to update the rules banks must follow to comply with CRA — many of them submitted by NCRC members. We anticipate a final rulemaking announcement later this fall. But with the banking industry pushing back harder than expected on the rules, it is crucial that we keep the public pressure on in support of the strongest possible final rule.

Help us spread the word in your community. 

Use the tools on this page to reach your friends and local leaders.

See how much CRA lending has gone into your community.

Source: Home Mortgage Disclosure Act Data from the FFIEC (pre-2018) and the CFPB (2018-2020). Originations only to borrowers that are low-or-moderate income or who are in a low-or-moderate income census tract. Business loans are from the FFIEC. Loans to businesses with less than $1 million in annual revenue or which are in LMI census tracts are included. These two figures are independent of each other and​ will have some loans that are counted in both figures.

WE NEED TO MODERNIZE CRA, NOT RELAX IT.

Take Action

Toolkit

Spread the word about CRA. Here are some things you can use.

  • Strengthening CRA is a critical component of a just recovery.
  • Persistent and worsening racial inequality must be addressed through consideration of race on CRA exams.
  • CRA reform must include more objective measures of performance that reduce ratings inflation. Ratings must better reflect distinctions in bank performance.
  • Geographical areas on CRA exams must not only include areas where banks have branches but areas beyond branch networks with significant amounts of bank lending and/or deposit activity.
  • Opportunities for public comment on merger reviews must be enhanced. Agencies should encourage community benefit agreements (CBAs) and should more regularly employ conditional approvals to rectify weaknesses in CRA and fair lending performance.
  • Data must be improved in order to more accurately assess CRA performance, particularly in community development financing and the provision of deposit products. The Section 1071 data on the race and gender of small business and farm loan applicants should be used on CRA exams.
  • CRA reform should reward banks for activities that focus on environmental remediation in LMI and communities of color and assist in the transition to a net zero carbon economy. In addition, any management risk guidelines issued by the federal bank agencies must not work at cross purposes with CRA and discourage banks from lending, investing and serving LMI and communities of color as a means to reduce risks associated with climate change.
  • CRA reform must include subtests that evaluate retail lending, retail services and community development financing and services. Requirements to engage in retail and community development activities must not be relaxed for banks that are currently examined for their performance on these activities.
  • Assessment areas must support and reflect a commitment to local lending, investments and services.
  • The Community Reinvestment Act (CRA) will be essential for COVID-19 economic recovery in the communities hardest hit by the pandemic.
  • A critical part of CRA examination is the consideration of the comments and views of community members.
  • Lower-income communities and communities of color have been the hardest hit by COVID-19. CRA will be essential for their economic recovery.
  • COVID-19 drove neighborhoods deeper into poverty.
  • Any new rules should help lower-income communities and communities of color recover from COVID-19, and not make things worse for them.
  • CRA modernization must maintain its focus on lower-income communities and communities of color
  • CRA reform must include the collection of improved community development and deposit data
  • The hardest hit communities will be most in need of reinvestment after COVID-19.
  • As the nation’s LMI communities look to recover from COVID-19, the government should raise and definitely not lower the bar for bank reinvestment in LMI communities.
  • CRA is supposed to make sure banks serve all the communities where they take deposits, not just the rich, White ones.
  • Three agencies regulate banks. They are working together to set CRA rules. Let’s be sure they get it right.

⏰⌛️⏱️ Time is running out to make your voice heard! Comment letters on the proposed update to Community Reinvestment Act rules are due THIS FRIDAY, August 5! Click here for guidance on how to submit comments, sample comment letters, and more: ncrc.org/treasurecra#take-action⌛️⏰⏱️

Let’s remind federal regulators any CRA rule must modernize and strengthen CRA so all communities have access to lending and investments. @USOCC @FDIC @FederalReserve #TreasureCRA https://bit.ly/3K6IhkT

To counter the effects of discrimination, Congress identified banks’ affirmative duty to meet the credit needs of their entire communities. A modernized and strengthened CRA must add a robust consideration of race. #TreasureCRA https://bit.ly/3uHsMcC

There are only a few days left to submit comments on CRA! In order to influence the final rule, community groups need to show up and submit comment letters. Need help drafting yours? Visit our #TreasureCRA page! www.ncrc.org/treasurecra#take-action

Changes to CRA rules that influence trillions of dollars of loans, investments, philanthropy and services in lower-income communities could offer a new path to survival for struggling local news and information providers. https://ncrc.org/could-a-banking-law-designed-to-end-redlining-drive-more-capital-into-local-journalism/

Communities cannot thrive without access to childcare – which is why it should factor into CRA modernization. TAKE ACTION: Submit comments to regulators on new rules that will shape our work for decadeshttps://ncrc.org/could-a-banking-law-designed-to-end-redlining-drive-more-capital-into-local-journalism/

Millions of LMI families face daily tradeoffs between housing, utilities, medical care, education, and food. Food security advocates have a tangible, simple, right-now moment for action: Submit comments to regulators on new CRA rules that will shape our work for decades! https://ncrc.org/why-food-justice-advocates-should-care-about-cra-reform/

 

(Twitter thread)

1/
🧵Friday, August 5 is the deadline to submit a comment letter about the Community Reinvestment Act to the @FDICgov @USOCC & @federalreserve.

Already sold? Click below for help submitting!

Wondering why this matters? Keep reading! #TreasureCRA ncrc.org/treasurecra#take-action

2/
CRA rules haven’t been meaningfully updated since 1995. Email had barely been invented. The dot-com bubble hadn’t happened. Hootie and the Blowfish were headlining stadium tours.

That’s why it’s such a big deal that regulators proposed sweeping changes this spring. #TreasureCRA

3/
By law, regulators are required to review all comment letters they receive on proposed rule changes like this. So when we tell them what we think of their proposal – what we like, what we don’t – they have to listen! #TreasureCRA

4/
CRA rules have a HUGE impact on quality of life in low- and moderate-income communities. They shape which community projects get funded and which don’t. Where BIPOC families and businesses can get loans and where they can’t. The stakes could NOT be higher! #TreasureCRA

5/
Care about gentrification? Then you care about CRA – and you should TELL THE GOVERNMENT WHAT YOU THINK: #TreasureCRA ncrc.org/treasurecra#take-action

6/
Care about access to childcare? Then you care about CRA – and you should TELL THE GOVERNMENT WHAT YOU THINK: #TreasureCRA ncrc.org/treasurecra#take-action

7/
Care about food security? Then you care about CRA – and you should TELL THE GOVERNMENT WHAT YOU THINK: #TreasureCRA ncrc.org/treasurecra#take-action

8/
Care about promoting Black economic power? Then you care about CRA –  and you should TELL THE GOVERNMENT WHAT YOU THINK: #TreasureCRA ncrc.org/treasurecra#take-action

9/
Care about closing the racial wealth divide in this country? About redlining? About financial discrimination? About access to affordable housing? Then you care about CRA – and your government needs to hear from you: #TreasureCRA ncrc.org/treasurecra#take-action

10/
The proposed rules are just that – a proposal. The regulators can make changes before finalizing the rules. This is our chance to show the regulators where they’ve done well and should resist criticism, and where they’ve come up short and should make changes. #TreasureCRA

11/
Whatever formal comments the regulators receive before the deadline on Friday 8/5, they must read and consider. So help us make sure they know what needs to be done for our communities, our neighbors, and our nation. Submit a comment today: #TreasureCRA ncrc.org/treasurecra#take-action

Don’t strip ‘community’ out of a law that’s supposed to strengthen communities.

What We Want:

Geography must remain the focus of CRA exams for all banks. We want banks to be graded  based on every geography where they lend or receive a significant percentage of their deposits. Lending isn’t tied to bank branches the way it used to be. But branches are still essential for low- and moderate- income people. Geography still matters. Neighborhoods still matter.

What We Can’t Let Happen:

We can’t eliminate geographic assessment areas. We can’t allow banks to cherry-pick where they lend – and where they don’t lend at all. We can’t allow banks to ignore the credit needs of distressed and vulnerable communities. We can’t allow a reboot of redlining.

Protect communities of color with explicit language against racial discrimination.

What We Want:

We want new language explicitly stating 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.

What We Can’t Let Happen:

In 2017, the Office of the Comptroller of the Currency (OCC) watered down the penalties for discrimination. We can’t allow regulators to allow banks to pass CRA exams if they discriminate.

Keep all lenders accountable.

What We Want:

We want the Community Reinvestment Act applied to all lenders, the same way it’s applied to traditional banks. The financial landscape has changed. Mortgage companies, credit unions, fintechs and other “nonbank” lenders now make the majority of the home loans in America.

What We Can’t Let Happen:

We can’t allow a majority of mortgage lenders to avoid CRA requirements. Banks and the Treasury Department have acknowledged that the financial landscape has changed, and that CRA should be updated to reflect the current marketplace and increase safe reinvestment in our communities.

Set a clearly-defined CRA grading system.

What We Want:

We want a clearly-defined grading system that emphasizes lending, branches, fair lending performance, and responsible loan products for working class families. We want each of these important aspects to get their due weight in analyzing a bank’s CRA performance. We do not support one ratio that lumps all of a bank’s activity together.

What We Can’t Let Happen:

We cannot allow a rating system that makes it easy for banks to pick the lowest hanging fruit and ignore critical community needs.

Don’t be afraid to let banks fail.

What We Want:

We need regulators unafraid to stand up to financial institutions. If a bank fails its CRA exam, or wishes to acquire a bank with a better CRA grade, agencies should recognize and encourage community benefit agreements. We want to motivate a race to the top across our financial industry.

What We Can’t Let Happen:

This spring, the OCC weakened its CRA enforcement by allowing banks with failed CRA ratings to merge, acquire, and grow their business. We cannot  allow regulators to adopt this policy. The “wink and nod” CRA exam has gone on long enough.

Read the rest of our principles for CRA reform.

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 _____,

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We’re counting on these people and organizations.

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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Reforming CRA must not become a pretext for relaxing CRA.

The fight is just beginning.

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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

Complete the form to download the full report: