Despite the CRA Requiring Fair Credit Access, New Proposal Would Let Banks Continue to Underserve Redlined Communities
FOR IMMEDIATE RELEASE
WASHINGTON—The National Fair Housing Alliance (NFHA), joined by 51 other national, state, and community-based organizations, filed a comment Tuesday urging the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) to withdraw a harmful proposal that would weaken the Community Reinvestment Act (CRA).The CRA became the law in 1977 to stop redlining and require banks to meet the credit needs of the communities where they take deposits, including low- and moderate-income Black, Latino, Asian and other neighborhoods of color.
The proposal would move hundreds of large banks into categories with lighter exams and leave nearly 80 percent of the banks regulators supervise subject to the least demanding test at a time when banks are closing at higher rates in upper-income Black communities than lower-income White communities. Banks in those categories can do far less to satisfy their CRA obligations, which means fewer loans and less investment in credit-starved neighborhoods, including support for affordable housing built with Low-Income Housing Tax Credits.
The proposal changes what counts against a bank when it breaks the law. It narrows the fair housing and fair lending violations that can lower a bank’s CRA rating and, through subtle changes in wording, removes redlining from that list, which undermines Congress’ intent for the law.
It adds new hurdles for banks that fund community nonprofits working on community improvement efforts.
The proposal also leaves out Special Purpose Credit Programs (SPCPs), which commenters universally supported in prior CRA rulemaking. From 2022 to 2024, SPCPs backed by Fannie Mae and Freddie Mac helped nearly 58,000 borrowers of all backgrounds become homeowners. According to the Federal Housing Finance Agency, those loans generated $17.2 billion in economic impact.
“Lending discrimination is not a relic of the past. Just recently, the U.S. Department of Justice achieved record settlements greater than $100 million with banks for their refusal to lend in Black and Latino neighborhoods throughout the nation,” said Nikitra Bailey, NFHA Executive Vice President. “Communities of color and rural towns have waited generations for banks to provide fair access to safe and affordable loans so they can enter into homeownership, launch a small business, and let seniors tap their home equity to age in place. This proposal gives banks a pass on redlining and makes it harder for them to support community nonprofits on the frontlines advancing economic development in underserved neighborhoods. It also leaves out Special Purpose Credit Programs, one of the most effective tools lenders have for doing what the CRA was written to do: serve the communities banks shut out for decades.”
Read the full comment here.
The following organizations signed the comment:
NATIONAL ORGANIZATIONS
- National Fair Housing Alliance
- Americans for Financial Reform Education Fund
- Coalition of Human Needs
- Consumer Action
- Legal Defense Fund
- Mobility Works
- National Association of Hispanic Real Estate Professionals (NAHREP)
- National Association of Real Estate Brokers (NAREB)
- National Coalition for Asian Pacific American Community Development (National CAPACD)
- Rebuilding Together
- Southern Poverty Law Center
- The Leadership Conference on Civil and Human Rights
STATE/LOCAL ORGANIZATIONS
Arizona
- Southwest Fair Housing Council
California
- Fair Housing Advocates of Northern California
- Fair Housing Council of Orange County
- Fair Housing Council of Riverside County
- Project Sentinel
District of Columbia, Maryland, Virginia
- Equal Rights Center
Florida
- Fair Housing Council of the Greater Palm Beaches
- Fair Housing Opportunities Project for Excellence, Inc.
- Urban League of Palm Beach County and Treasure Coast
Georgia
- Metro Fair Housing Services, Inc.
Idaho
- Intermountain Fair Housing Council, Inc.
Indiana
- Fair Housing Center of Central Indiana
Illinois
- Access Living
- Chicago Lawyers’ Committee for Civil Rights
- HOPE Fair Housing Center
- Neighborhood Housing Services of Chicago
- Open Communities
- South Suburban Housing Center
Louisiana
- Louisiana Fair Housing Action Center
Massachusetts
- Alternatives for Community and Environment, Inc.
Michigan
- Fair Housing Center of Southwest Michigan
- Fair Housing Center of West Michigan
Mississippi
- HEED
New Jersey
- New Jersey Citizen Action
- New Jersey Institute for Social Justice
New York
- Housing Opportunities Made Equal, Inc. of Buffalo, NY
- Fair Housing Justice Center
- Westchester Residential Opportunities
North Dakota
- High Plains Fair Housing Center
Ohio
- Fair Housing Resource Center
- Housing Opportunities Made Equal of Greater Cincinnati
- Miami Valley Fair Housing Center, Inc.
Pennsylvania
- Fair Housing Partnership of Greater Pittsburgh
- Fair Housing Rights Center in Southeastern PA
- Rebuilding Together Pittsburgh
Tennessee
- Fair Housing Council of Metropolitan Memphis
Virginia
- Housing Opportunities Made Equal of Virginia (HOME)
Washington
- Fair Housing Center of Washington
Wisconsin
- Metropolitan Milwaukee Fair Housing Council
Press inquiries: jglover@nationalfairhousing.org
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About the National Fair Housing Alliance
The National Fair Housing Alliance leads a coalition that works to build inclusive, well-resourced, and resilient communities; expand equitable opportunities; and end housing discrimination.