Tug-of-war over anti-redlining law heads back to the drawing board

The Real Deal, October 11, 2021, Tug-of-War Over Anti-Redlining Law Heads Back to the Drawing Board

The CRA was passed in 1977 to prevent banks from refusing to lend in or near communities of color, a practice known as redlining. The law applies to all institutions insured by the Federal Deposit Insurance Corporation.

Trump-appointed regulator Joseph Otting, previously a career banking executive, proposed a series of overhauls to a 1970s redlining law last year, which critics viewed as a giveaway to the banking industry.

“What the OCC was proposing was a complete destruction of atoning for the sins of redlining,” said Josh Silver, a senior policy advisor at the National Community Reinvestment Coalition, one of the groups that sued to prevent the new rules from being implemented.

The OCC, FDIC and Federal Reserve are now working together to “develop a consistent framework across all banks that encourages higher levels of responsible lending, investments, services and greater community engagement,” the OCC said in September.

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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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