WASHINGTON, D.C. – This week in a board meeting, the Board of Governors of the Federal Reserve approved its draft Advance Notice of Proposed Rulemaking (ANPR) on the Community Reinvestment Act (CRA). In May, the Office of the Comptroller of the Currency finalized its CRA rule, while the Federal Deposit Insurance Corp. (FDIC) has yet to join an agency in finalizing a CRA rule.
The CRA is a civil rights law designed to expand financial opportunity. The law requires banks to meet the credit needs of the communities in which they are chartered. The CRA was created to be a key driver in financial equity, helping to spur hundreds of billions of dollars of investment in underserved areas. Yet, the CRA requires strengthening to evolve with the changing banking landscape and to fully meet its statutory mission.
Center for Responsible Lending Executive Vice President Nikitra Bailey released the following statement:
“Unlike the OCC’s approach in finalizing a deeply misguided rule without stakeholder support, we appreciate the Federal Reserve’s commitment to a data-driven process that solicits broad input. The Federal Reserve should ensure that updated regulations account for the harsh realities of discrimination that still plague today’s financial marketplace.
“CRA was designed to undo the injustices created by the horrific practice of redlining and to expand financial opportunity, equity, and help spur investments in underserved areas. Our nation’s most recent reckoning with racial injustice has elevated the recognition and urgency to enact significant reforms to address structural racial barriers and provide opportunity to LMI families and people of color. CRA must be one of the major tools to provide these long overdue reforms.”