NCRC and 493 Community Groups Oppose OCC, FDIC Proposed CRA Changes

Today, the National Community Reinvestment Coalition (NCRC) along with 493 NCRC member organizations and community, civil rights, housing and consumer groups submitted a comment letter to the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) opposing the proposed changes to the Community Reinvestment Act (CRA).

"Nearly 500 organizations are speaking with one voice: weakening CRA means less accountability for banks and less investment in communities that have historically been denied it," said NCRC's President and CEO Jesse Van Tol . "For nearly 50 years, the Community Reinvestment Act has helped ensure that banks have a responsibility to serve the entire communities where they do business. This proposal moves us in the wrong direction. It would subject hundreds of banks to less rigorous evaluations, reduce scrutiny of whether banks are actually serving their communities, lower expectations for community development activity and eliminate important data that helps the public hold banks accountable. The extraordinary response to this proposal shows just how much is at stake."

"For communities that have fought for decades for fair lending and economic opportunity, the Community Reinvestment Act (CRA) is more than a regulation. It is a lifeline," said Carol Johnson, chair of NCRC's board of directors and president & CEO of Johnson Consulting Group . "Our members see firsthand how critical CRA is to expanding homeownership, increasing access to small business capital and driving neighborhood investment. These challenges persist even with CRA's protections in place. Weakening the law would only deepen existing barriers and jeopardize decades of progress."

"I began my banking career before the Community Reinvestment Act became law in 1977, and I know firsthand why this legislation was necessary. Nearly 50 years later, we should be strengthening the CRA, not weakening it," said Bob Dickerson, NCRC board member and executive director of Birmingham Business Resource Center . "Here in Alabama, CRA has helped bring billions of dollars in lending and investment into communities, supporting affordable housing, small businesses, homeownership and neighborhood revitalization. I've witnessed that progress firsthand through decades of community reinvestment work, but we still have a long way to go. The fact that nearly every bank receives a satisfactory or outstanding CRA rating while so many communities continue to struggle with disinvestment tells us we haven't yet accomplished what the law was intended to achieve. Weakening CRA now jeopardizes the progress we've made in Alabama and threatens the partnerships and investments necessary to move our communities forward. Banks have an obligation to serve the communities from which they draw their deposits and generate their profits. Our challenge should be to move beyond regulatory compliance to measurable community impact, not retreat from the progress we've made."

"Congress passed the Community Reinvestment Act because banks were redlining entire neighborhoods," said Elisabeth Risch, NCRC board member and executive director of HOME of Greater Cincinnati . "In Cincinnati, we still see the effects today. Our communities need sustained investment in quality affordable housing. CRA is meant to make banks responsive to those needs. This proposal would sharply cut bank investment in affordable housing and essential services for low- and moderate-income communities and communities of color. It sets the bar so low that the bare minimum will become the norm. The neighborhoods most harmed by redlining will pay the price."

"CRA is the most important tool in my toolbox," said Ernie Hogan, NCRC board member . "Over the last 38 years, CRA enabled me to advance over $1 billion in new affordable housing and development in the marginalized communities of western Pennsylvania!"

NCRC's analyses of the proposed CRA changes have found that the consequences could be substantial. Among 69 of the nation's largest banks, current community development lending, investments and grants total about $102 billion annually. Applying the proposal's new 0.625% benchmark would amount to just $14.8 billion, roughly 85% below current activity. A separate NCRC analysis found that proposed strategic plan benchmarks could put $71 billion in annual community development financing at risk. By changing which banks receive more rigorous CRA examinations, the proposal would eliminate community development requirements for roughly 814 banks, remove separate branch evaluations for another 417 banks and leave more than 5,000 bank branches in low- and moderate-income communities without the same level of CRA scrutiny they receive today.

"The message from hundreds of community organizations is simple: do not lower the bar for banks," Van Tol said . "Regulators should be building on what CRA has accomplished over nearly 50 years and finding ways to make it stronger, more transparent and more responsive to the needs of communities across the country."

The 493 NCRC member organizations and community, civil rights, housing and consumer groups that signed on to NCRC's comment letters:

To read NCRC's comment letter, visit here.