Congresswoman Maxine Waters (D-Calif.) led a letter with 76 other Democratic members of the House of Representatives urging the Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corp. (FDIC) to carefully consider the comments received from civil rights and community groups regarding the proposed updates to Community Reinvestment Act regulations.
The Fed, OCC and FDIC issued a notice of proposed rulemaking to update the CRA in May. The proposal would see substantial changes made to CRA rules for the first time in nearly 20 years.
The letter also called on the regulators to finalize CRA rules that take a strong stance against “modern-day redlining” by ensuring:
- CRA exams take into account bank activities that impact communities of color as well as low- and moderate- income communities.
- Banks get CRA credit only when they make meaningful investments in communities.
- CRA exams become more rigorous.
“We are heartened by your agencies’ efforts to put forward a new proposal to modernize the CRA, which represents a once in a generation opportunity for federal bank regulators to end redlining and its present-day manifestations. The CRA became law in 1977 and the last time your agencies came together to reform CRA rules was in 1995, nearly three decades ago. Significant changes in the financial marketplace have taken place since that time…many of those changes have contributed to less effective CRA rules,” wrote the lawmakers. “We appreciate your agencies’ joint efforts to work together to advance a much-needed update to CRA rules. As you work to finalize the rule, we urge you to consider our recommendations as well as those from civil rights groups, consumer advocates, and other affected stakeholders.”
To read more about regulators efforts to address “modern-day redlining” download the Marketing Compliance for Lenders Special Report.