Yesterday, the Federal Reserve Board of Governors, the Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) advanced an interagency notice of proposed rulemaking outlining changes to the Community Reinvestment Act (CRA).
Low Income Investment Fund’s (LIIF) CEO, Daniel A. Nissenbaum, issued the following statement in response to the proposal:
“The Community Reinvestment Act has been the single most transformational piece of legislation for Community Development Financial Institutions (CDFI) like LIIF and the people and communities we serve. Enacted as an anti-redlining law, CRA has directed hundreds of billions of dollars towards impactful community investments that would not have been financially feasible without the CRA-motivated capital provided by bank investors. LIIF is eager to see this interagency proposed rule build on last year’s proposal from the Federal Reserve Board of Governors and seek to improve core challenges in current CRA regulations, including the geographic misalignment between where banks have branches and where communities have the greatest need.
Still, we recognize that CRA will not fully achieve its intended purpose until the regulations embed race in the evaluation process. Redlining explicitly targeted communities of color, and any efforts to repair this legacy must center the communities directly impacted. LIIF has previously provided detailed recommendations to modify CRA, including steps to advance racial equity, and we will provide additional comments to the regulators as we work toward a more equitable and impactful CRA.”
Stakeholders will have until Aug. 5, 2022 to submit public comments in response to the proposal.