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New York City Defends the Community Reinvestment Act

January 3, 2019

New York City is standing up to protect a critical law that helps ensure banks reinvest equitably in marginalized communities. The Community Reinvestment Act (CRA) is one of the most important laws we have to hold banks accountable to local communities, and the OCC’s proposal would be the first major overhaul to the CRA in over 20 years.

In late August, the Office of the Comptroller of the Currency (OCC) initiated a process to "modernize" the CRA. While updates are needed, we have serious concerns about some of the principles laid out that threaten the very heart of the CRA, including minimize or eliminate local obligations; cut out the role of community input; reduce focus on branches; prioritize larger deals over smaller, but more impactful activities; and take the focus away from low- and moderate-income (LMI) populations. 

The OCC regulates the largest banks in the country, but they are initiating this process alone without other bank regulators at the Federal Deposit Insurance Corporation (FDIC) and Federal Reserve Board as part of the process. This could potentially create a system where the largest banks are examined under different rules than other banks in the country, creating an unequal playing field, with potentially easier CRA rules for the largest banks.

Over the past few months, ANHD and our members have been standing up strong to defend and strengthen the CRA by:

  1. Submitting Public Comments: The OCC received over 1,500 comments on their Advance Notice of Proposed Rulemaking (ANPR), including ours. The National Community Reinvestment Coalition (NCRC) found that two thirds of those comments were clear that the CRA must be preserved and strengthened, and opposed the one-ratio approach and other ideas that would weaken the law. ANHD members, ally organizations, and allies in New York City and State government were among the commenters.
  2. Speaking Directly to Regulators: Over the course of the past few months, ANHD and our members have been in regular communication with regulators at all three federal agencies that regulate banks. On Friday, December 14th, we took our message to Washington, D.C. where staff, tenant leaders, and members from ANHD, Community Action for Safe Apartments (CASA), Banana Kelly, University Neighborhood Housing Program (UNHP), Center for New York City Neighborhoods (CNYCN), Business Outreach Center Network (BOCNET), and IMPACCT Brooklyn met directly with the new Chair of the FDIC, Jelena McWilliams, as well as representatives from Congressman Hakeem Jeffries’ office and the OCC. We took the opportunity to share our concerns with the OCC’s approach and urge the regulators to protect and strengthen the CRA.
  3. Hosting Local CRA Forums: In October, ANHD, UNHP, and Enterprise co-hosted a forum called “The CRA at a Crossroads: Understanding the Impact and Ensuring the Future of the Community Reinvestment Act”, with keynote speaker FDIC Board Member and Former Chairman Martin J. Gruenberg who spoke forcefully against the one-ratio approach and in favor of a strong, locally rooted CRA. UNHP also hosted a forum in June titled, “Looking Back and Thinking Forward: Community Reinvestment Act at 40, where ANHD, Enterprise, and Banana Kelly spoke to the importance of preserving and strengthening the CRA. In May, Bridge Street Development Corporation led a community reinvestment forum with Council Member Cornegy, Assembly member Tremaine Wright and other local organizations, focused on ways banks can increase access to banking and loans for individuals and small businesses in Central Brooklyn. 
  4. Supporting Cypress Hills LDC / East Brooklyn Annual Reinvestment Forum: The D.C. visit came just a week after the East Brooklyn Reinvestment Committee of Cypress Hills LDC (CHLDC) held their 26th annual Reinvestment Forum. This powerful forum gets at the heart of the CRA, which requires banks to reinvest and lend equitably in the local areas where they do business, by focusing on banks in the Cypress Hills / City Line area of Brooklyn and throughout Brooklyn Community District 5. Through public data, results from a recent CNYCN study, stories, and the experiences of community members and CHLDC staff, the reinvestment committee revealed trends in the lending market, highlighted community needs, and made concrete recommendations to banks and legislators. The committee offered a comprehensive set of recommendations, including to prevent the displacement of residents and small businesses of Cypress Hills/East New York in this period of intense real estate speculation and hyper-gentrification; to pass legislation like the “Flip Tax for NYC” legislation, a “Cease & Desist” program for homeowners; protect and strengthen the CRA; enforce fair lending laws; expand responsible lending, banking, services, and financial education; and support foreclosure prevention actions.

The Community Reinvestment Act is one of most important tools we have to bring banks to the table.  It’s most effective when banks have a strong local obligation and the local community participates. It’s critical that both are maintained and strengthened. We call on all banks in New York City to act by responding to local needs with products, loans, investments and services. And we call on all stakeholders – banks, regulators, government, and the community – to do all possible to preserve and strengthen the CRA. ANHD members will continue this work in the coming months and years.

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