The ANHD Blog raises the profile of our issues, and educates our member groups, city decision makers, and the general public on our core issue areas. The ANHD Blog offers sharp, timely and effective commentary on key public policy issues, as well as our work and the work of our member groups.
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ANHD's Banking Policy Platform was updated on April 21, 2020 to reflect new developments and priorities in collaboration with our Equitable Reinvestment Coalition.
New Yorkers rely on banks in their daily lives for banking services, loans, mortgages, and a place to safely store their money. This applies to all sectors - individuals, businesses large and small, landlords, non-profits, and municipalities. Low-income people, Black and Brown New Yorkers, small businesses, and tenants have been struggling for years to access affordable banking and services. These struggles are greatly exacerbated during this crisis.
The Covid-19 pandemic is forcing New York State to implement a “pause” which closes businesses and restricts person-to-person contact. While necessary, the pandemic response is rippling through New York’s economy and is already having impacts on residents and businesses. Shuttered storefronts mean a loss of revenue for small business owners. Workers are already seeing a decrease in income as they face layoffs or cut hours. The economic damage caused by this loss of revenue and income will compound as people struggle to afford bare necessities.
In light of the Covid-19 pandemic response, banks must take proactive steps to mitigate the resulting economic fallout. Banks already have an obligation under the Community Reinvestment Act and as responsible corporate actors to respond appropriately to protect the most vulnerable.
The Association for Neighborhood Housing and Development (ANHD) calls on banks and policy makers to implement measures related to:
Small businesses are suffering because of COVID-19. Many small businesses, especially those led by people of color and immigrants, have long struggled to stay open in light of rising costs and lack of access to financing. Many small businesses and their employees are now hit hard as they have had to reduce employees or shut down entirely. In order to weather the storm, they need financial support, including action from banks:
Low-income tenants have long been vulnerable to displacement by landlords looking to bring in higher-paying tenants. During this extreme financial duress, that pressure is sure to increase. The state’s recent eviction moratorium is a positive step, but will require additional response by banks:
Banks make tens of billions each year in monthly maintenance, overdraft, and ATM fees. During normal times, this is a hardship for low-income clients, and now it’s even harder for people to make ends meet. Banks should respond swiftly.
In order to prevent displacement and further financial hardship for low-income, Black, and Brown homeowners during this economic crisis, banks should be doing everything possible to ensure homeowners and tenants can remain in their homes, without fear of eviction or further financial hardship
Nonprofits are always on the front lines, serving the most vulnerable populations. ANHD members both serve and are led by low-income people of color who are the hardest hit by this financial crisis. These organizations are now simultaneously having to attend to internal work and staff needs, while also continuing to serve the same populations with housing, loans, services, and supports.
Nonprofit developers do not have the same cushion as for-profit developers, as they put more of the money they receive back into their buildings in maintenance and services. As April 1st nears, with many tenants out of work and unable to pay the rent, they will be left with a huge cash flow crisis, with few resources remaining to maintain the buildings while also meeting their debt obligations.
It is critical that banks provide additional supports for nonprofit developers
ANHD applauds the CRA regulators – including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) – for putting out this guidance encouraging banks to respond to the COVID-19 crisis. But OCC and FDIC must suspend the CRA "modernization" process until the crisis is over, and, as ANHD has long advocated, throw it out entirely and start over. The attention of all stakeholders has correctly shifted to responding to this crisis – regulation with as large an impact as the CRA cannot be moved forward during this time of crisis. Our additional recommendations to the CRA Guidance include:
The OCC and FDIC must suspend the CRA regulatory process until the crisis is over. The attention of all stakeholders has correctly shifted to responding to this crisis - regulation with as large an impact as this cannot be moved forward during this time of crisis. It’s also worth mentioning that the interagency guidance from all three agencies includes access to banks and banking that are eliminated from the proposal and would not be allowed under that new proposed regime.
Prompt, responsible action by banks will make a difference in the lives of millions of low-income New Yorkers who are impacted by the COVID-19 pandemic.