The State of Bank Reinvestment in New York City: 2016

This annual report helps communities, legislators, regulators, and the financial sector to better understand the impact of the Community Reinvestment Act (CRA) at a local level and how to better meet the needs of our city’s families and neighborhoods. The CRA is based on the understanding that quality intentional bank reinvestment is necessary to build and preserve affordable housing, provide access to safe affordable banking services, revitalize neighborhoods, and support quality jobs.

This report comes at a critical moment for our city and our country. 2017 is the 40^th anniversary of the CRA, which should be a moment for celebration and reflection. But 10 years out from a financial crisis that was a direct result of irresponsible behavior by financial institutions, we are now facing a federal regulatory environment that seeks to roll back key bank regulations designed to protect consumers and communities. At the same time, we are facing historic cuts in funding for affordable housing and social safety net programs, adding to the risk of increasing disenfranchisement of poor and minority people and communities.

ANHD’s report provides a unique analysis of the CRA activity of 25 banks that operate in New York City, including some of the largest banks in the country.

05/01/2017

Key Findings

The number of bank branches remained relatively stable across the City, but the distribution remains inequitable, with core Manhattan inundated, while lower-income neighborhoods still lack sufficient branches and ATMs. The Bronx remains the most unbanked borough in the City.

The multifamily market remains strong, and the number of loans picked up again overall and in LMI tracts among banks in this study. While signs of physical and financial distress remain low, rising rents and sales prices – especially in historically more affordable neighborhoods – increase the pressure on lower-income tenants, putting them at risk of displacement by bad actor landlords who use legal and semi-legal tactics to push them out. These landlords still get financing by both bank and non-bank lenders.

The number of home purchase loans for 1-4 family homes was relatively stable from 2014-15after a sharp decline in 2013. The rise of non-CRA-covered lenders continues, with 31% of home purchase loans and 51% of refinance loans being made by non-CRA covered lenders. Racial disparities in lending persist. 22% of New Yorkers are Black and 29% are Hispanic, yet on average the banks in this study made just 9% of home purchase loans to Blacks and 8.2% to Hispanics.