The Federal Deposit Insurance Corp. (FDIC), the Federal Reserve Board of Governors and the Office of the Comptroller of the Currency (OCC) today issued joint proposed regulations for updating requirements under the Community Reinvestment Act (CRA).
CRC Executive Director Paulina Gonzalez-Brito released the following statement in response to the proposal:
“Over the last couple of years, we’ve witnessed a flurry of bank mergers as well as a widening of the racial wealth gap and continued disinvestment in rural and low-to-moderate income communities. The proposed updates represent a welcome opportunity toward finally updating this critical civil rights law to stem these issues.
“We applaud the agencies for their work to strengthen the CRA. Still, the proposed rules do not go far enough toward meaningfully and explicitly addressing race and not just income. Black, Indigenous and People of Color communities have waited decades for updates that redress the continuous harms to their communities and help level the economic playing field. A race-conscious CRA would not only accomplish this but also allow the law to fully live up to its promise of being the nation’s anti-redlining law.
“We support moving forward the Notice of Proposed Rulemaking, but we hope the final rule changes from the three agencies will meaningfully address race.”
The Community Reinvestment Act was enacted in 1977 in response to the longstanding history and effects of redlining. The legislation established an obligation for financial institutions to meet the credit needs of the communities they serve. The CRA also ensures that banks reinvest deposits from these communities back into the corresponding areas.
The proposed modernizations come just six months after the OCC rescinded its disastrous 2020 CRA rule and pledged to work with the Federal Reserve and the FDIC on new rules. In June 2020, the California Reinvestment Coalition, NCRC, Democracy Forward and Farella Braun + Martel sued the OCC to halt the harmful rule.