I am writing in response to the recent Community Voices commentary “Proposed changes would slow progress toward equitable lending in minority communities.” It highlights several alarming proposals the FDIC and OCC are considering about the Community Reinvestment Act (CRA). The CRA requires banks to make investments in the communities and where they operate.
Among the changes mentioned is an expansion of activities for which banks get credit. This change allows a range of activities – including upgrades to sports stadiums – to qualify as investments in low-income communities. This is ridiculous.
These changes would almost certainly come at the cost of community-centered needs. The purpose of the CRA is to ensure that those making profits in our community are not leaving parts of our communities behind. Particularly affected would be communities historically (and currently) excluded from banking and wealth-building infrastructure. I’m deeply concerned that these policy changes would incentivize large-scale projects, like financing a private hospital, over making loans to low- and moderate-income people. The CRA is critical for creating a more equitable community. We must be vigilant that any changes to the CRA do not bypass our obligation to meet community credit and banking needs.