Blog: Rep. Waters introduces bill to reform the Community Reinvestment Act – Financial Regulation News – Financial Regulation News

U.S. Rep. Maxine Waters (D-CA) introduced legislation that would make reforms to the Community Reinvestment Act (CRA) designed to eliminate discrimination in the banking system and close the racial wealth and homeownership gaps.

© Shutterstock

The Making Communities Stronger Through the Community Reinvestment Act (H.R. 8833) would ensure that bank services, loans, and investments are meaningful and responsive to the needs of low- and moderate-income communities and communities of color. Further, it would provide local communities with more of a say on banks’ CRA exams and activities. In addition, it would require CRA examiners to consider all unlawful activity on banks’ CRA exams and require CRA exams to evaluate bank lending done in partnership with non-banks and fintechs. Also, it would encourage lenders to make more small-dollar mortgages, specifically those under $100,000. Finally, it would seek to better identify ongoing discrimination or racial disparities and provide a pathway to consider this information on bank exams in the future.

“More than 40 years ago, Congress passed the CRA in response to racist policies in banking and lending that excluded Black homebuyers and renters from affordable housing options and robbed Black families of the opportunity to build wealth through the American dream of homeownership. Unfortunately, even after so many years, there’s been very little progress,” Waters, chairwoman of the House Committee on Financial Services, said. “This bill will hold banks accountable to the local communities where they have branches or do most of their lending and make crucial updates to ensure they are providing equal access to affordable credit, investing in the communities they serve, and doing their part to close the widening racial wealth gap. We can’t wait any longer.”

The bill is endorsed by the Association for Neighborhood and Housing Development, California Reinvestment Coalition, National Alliance of Community and Economic Development Associations (NACEDA), National Community Reinvestment Coalition, National Coalition for Asian Pacific American Community Development (CAPACD), ProsperityNow, and UnidosUS.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s