For Immediate Release
Tuesday, July 20, 2021
San Francisco, CA — Today, the Biden Administration announced it will propose to rescind a Trump-era rule that rolled back essential anti-redlining protections, a welcome next move for a Trump-era rule that was unlawful and would have disastrous consequences for marginalized communities. Today’s announcement follows the Office of the Comptroller of the Currency (OCC)’s announcement in May 2021 that the agency would halt further implementation of its 2020 CRA rule to allow for reconsideration of the rule in its entirety.
Last year, the National Community Reinvestment Coalition (NCRC) and the California Reinvestment Coalition (CRC), represented by Democracy Forward and Farella Braun + Martel, filed a lawsuit seeking to block the implementation of the OCC’s rule, claiming that it violated the Administrative Procedures Act and was finalized without sufficient data to support the revisions. In January 2021, a federal judge rejected the OCC’s attempt to dismiss the lawsuit. The lawsuit is still pending.
“Today’s announcement proves that when communities fight back against injustices they win,” said CRC Executive Director Paulina Gonzalez-Brito (they/them). “The OCC’s CRA rule issued under the Trump Administration and former Comptroller Joseph Otting was an outright attack on this important civil rights law meant to protect communities from redlining and discrimination, and ensure that financial institutions serve all communities regardless of race, ethnicity and income. The attack on the CRA was one in a long list of assaults on civil rights laws and BIPOC by the Trump administration including, weakening fair housing and fair lending enforcement and turning back payday loan protections at the Consumer Financial Protection Bureau, as well as diluting HUD rules to fight discrimination and segregation.
“Equally as important is acknowledging the hard work from BIPOC communities, who have demonstrated their resilience and organization time and time again. For decades, BIPOC communities have organized to push big banks to end discriminatory lending practices. And, once again, they organized to push back as the Trump Administration attempted to destroy the CRA.
“Along those same lines, CRC and our members pushed forward to stand against Trump’s OCC by organizing and filing a lawsuit with our partners, Democracy Forward and the National Community Reinvestment Coalition. This demonstrates that when we stand up for what is right and just, we win. Today, we celebrate the hard-fought victory of Black, Indigenous, People of Color,” Gonzalez-Brito said.
“This is great news and a big deal for lower-income communities and people of color who have suffered for decades from lending discrimination and underinvestment in entire neighborhoods, and also for community advocates and banks that have struggled with outdated and confusing rules,” said NCRC CEO Jesse Van Tol. “It’s also critical for families and communities of color who were disproportionately impacted by the pandemic and who now face a longer road to financial recovery.”
Jeffrey Dubner, Managing Senior Counsel at Democracy Forward, said, “The CRA is critical to protecting communities of color from the discriminatory practice of redlining. Amid a pandemic, ongoing economic challenges, and urgent and continued calls for racial justice, today’s announcement is a welcome and necessary step forward. We will continue our work with the NCRC and CRC to ensure the OCC follows the law and fulfills the purpose of the CRA.”
The CRA was enacted to address redlining and secure access for communities of color and low- and moderate-income communities to financial services that have long enabled affluent, white communities to build wealth. Under the CRA, banks are required to meet the financial needs of the communities in which they do business by reinvesting deposits in those communities instead of investing the communities’ money elsewhere. Trump’s OCC issued a rule in June 2020 that dismantles key CRA protections, decreasing investment in low- and moderate-income communities and communities of color.
As William J. Bynum, the CEO of Hope Credit Union — a Black-owned credit union providing financial services to people in economically distressed parts of Alabama, Arkansas, Louisiana, Mississippi, and Tennessee — explained in a declaration submitted to the court as part of the lawsuit, the Trump administration’s rollback “threatens our ability to meet the credit and depositary needs of our communities” by “deprioritiz[ing] meaningful CRA activities in the distressed communities we serve and encourag[ing] larger, easier activities.”
Megan J. Uzzell
Democracy Forward is a nonprofit legal organization founded in 2017 to litigate challenges to unlawful executive branch action on behalf of organizations, individuals, and municipalities. The organization has taken 650 legal actions and reversed dozens of harmful policies. Democracy Forward is expanding its work, building on its success to confront unlawful threats to democracy and social progress.
The California Reinvestment Coalition (CRC) is the largest statewide community reinvestment coalition in the country, with over 300 member organizations across California that provide services to tens of thousands of Californians. CRC members include affordable housing developers, community development financial institutions, housing counseling agencies, small business technical assistance providers, legal services agencies, and community-based organizations.