Why the CRA Matters

ANHD CRA FACT SHEET

The CRA is the reason why banks make loans to lower-income homebuyers, open or maintain branches in lower-income neighborhoods, invest time, resources, and money into community-based organizations and local projects for affordable housing, economic development, and more. With changes in the banking industry, persistent discrimination and racial disparities, and threats of displacement, the CRA need updating. However, the proposed changes to the CRA are not coming from the people impacted by redlining and disinvestment. They are driven by former banker turned Comptroller Joseph Otting of the Office of the Comptroller of the Currency (OCC). Even worse, the FDIC is joining them, allowing up to 70% of their banks to opt out, and the Federal Reserve Board is not supporting this flawed plan. This creates a confusing, bifurcated system with two of the three federal bank regulators offering proposals for the largest banks that threaten the very heart of this important law, while doing little to nothing to address its shortcomings.

Now is the time to fight back! Comments matter. Read more to learn about how the CRA helps you and your community, ways it needs to be strengthened, and why the OCC’s approach is the wrong one. The comment period is just 60 days, which gives us very little time to respond.

Why Do We Need to Preserve & Strengthen the CRA?

• Discrimination in lending is still a problem for Black and Brown people.
• Speculative multifamily lending and lending to bad acting landlords contributes to harassment and displacement.
• Banks continue to close branches and charge high fees for banking.
• CRA covered lending is safer and less likely to result in foreclosure than non-CRA covered lending.
• Online bank lenders lend nationwide yet are only evaluated on their lending around their headquarters. Non-bank lenders are not covered by the CRA, meaning no regulator evaluates how equitably they are lending, nor do they have any obligation to reinvest in local communities.
• Low-income communities of color have disproportionally fewer bank branches and do not have the banking products they need to conduct transactions and build wealth.