OFN Statement on Proposed Changes to the Community Reinvestment Act

OFN Statement on Proposed Changes to the Community Reinvestment Act

Washington, D.C. - Opportunity Finance Network (OFN) is deeply concerned about the changes proposed in the Notice of Proposed Rulemaking (NPRM) for the Community Reinvestment Act (CRA) by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC). Taken together, these proposed rules would harm communities and significantly weaken CRA and the incentives it creates for banks to invest in affordable housing and homeownership, small business growth and job creation, small farms, and community development projects across America, particularly in places that have historically lacked access to capital.

In response to the release of this proposed rule, Harold Pettigrew, President and CEO of Opportunity Finance Network provided the following statement:

"At a time when America needs greater access to capital and affordability, not less, we should be strengthening the tools that bring investment into communities across the country. Families are confronting the rising cost of housing. Entrepreneurs need access to affordable financing to start and grow businesses. Rural and urban communities alike need investment in the institutions and infrastructure that create economic opportunity.

"For nearly five decades, the Community Reinvestment Act has been one of our nation's most important tools for meeting those needs. The fact is CRA works. CRA has helped connect the strength of America's banking system with communities and markets that have historically lacked access to capital, mobilizing hundreds of billions of dollars in lending and investment each year. CDFIs have become an important part of that infrastructure, working alongside banks to translate capital into affordable housing, growing businesses, community facilities, and stronger local economies.

"There is a reason CDFIs have earned strong bipartisan support. Across the country, there is broad recognition that communities need greater access to capital and economic opportunity. CRA helps turn that shared objective into investment, incentivizing financial institutions to put capital to work in communities, including through partnerships with CDFIs and other community institutions that understand local needs and opportunities.

"That is why I am deeply concerned by provisions in this proposal that would weaken the incentives for community investment. We should not accept a regulatory framework that results in less private capital reaching communities that already struggle to attract investment. I am particularly concerned about proposed changes to bank asset thresholds and definitions of community investment, as well as an approach to grants that does not adequately recognize their critical role in the balanced mix of capital, capacity, and partnership needed to effectively deploy investment in communities. The question before us should be how we bring more private capital to these communities, how we expand opportunity, and how we make the financial system work better for more Americans.

"OFN's formal comment to this proposed regulatory change will strongly encourage the OCC and the FDIC to work with the Federal Reserve to work toward a durable and consistent interagency CRA framework. A unified approach provides greater certainty for financial institutions and community partners and ensures greater consistency in how CRA is implemented across the banking system.

"Reducing unnecessary regulatory burden and providing greater clarity are legitimate goals. But regulatory efficiency and community investment are not competing objectives. We can and should achieve both.

"As the OCC and FDIC consider changes to CRA, the measure of any final rule should be whether it strengthens the flow of capital to communities and expands economic opportunity. On that measure, significant provisions of this proposal need to change."

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About Opportunity Finance Network (OFN)

Opportunity Finance Network (OFN) is the nation's leading network and intermediary focused on community development investment, managing more than $1 billion in total assets and a membership of nearly 500 community development financial institutions (CDFIs), which includes community development loan funds, credit unions, green banks, banks, minority depository institutions, and venture capital funds. Our network of CDFIs works to ensure communities left behind by mainstream finance have access to affordable, responsible financial products and services, with a deep focus on serving rural, urban, and Native communities across the United States. OFN is a trusted investment partner to the public, private, and philanthropic sectors - foundations, corporations, banks, government agencies, and others - and, for more than 40 years, has helped partners invest in communities to catalyze change and create economic opportunities for all.

Since its founding in 1986, OFN members have originated more than $136 billion in cumulative financing, helping to create or maintain nearly 3.8 million jobs, start or expand nearly 1.2 million businesses and microenterprises, and support the development or rehabilitation of nearly 3 million housing units and nearly 16,000 community facility projects.

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