The Community Reinvestment Act (CRA) was landmark legislation passed in 1977 to help address decades of redlining by banks which had avoided providing financial services in low income communities or non-white neighborhoods; consequently, banks made fewer loans to people of color, closed (or never opened) branches in low income neighborhoods, and generally ignored the financial needs of many in our country.. Though it’s far from perfect and needs an update, the CRA has held banks more accountable to serving the financial needs of all the residents and stakeholders in each bank’s respective market.
The Trump Administration recently proposed a substantial gutting of the Community Reinvestment Act. I grew up in a low income community in rural Missouri and now live in a low income neighborhood in Hartford, Connecticut – both will suffer if these reforms to CRA are enacted. As was the case prior to the passage of the CRA, the proposed changes will result in less accountability for where and to whom banks provide their products and services, and will eliminate much of the mandate to serve low income areas. So you can expect to see fewer loans to small business owners, fewer mortgages to homeowners, banks will provide fewer donations and sponsorships to nonprofits serving these communities, and less support for financial literacy, small business, and homeownership counseling activities. More branches will likely be closed in poor rural and urban neighborhoods.
Whether you’re Republican or Democrat or independent, please contact your congressperson or senator and express your concerns about the proposed revisions to the Community Reinvestment Act. Additionally, you can also email your concerns to CRA.reg@OCC.treas.gov and/or comments@FDIC.gov
You can read more background on the proposed changes here: