National CAPACD, alongside over 40 coalition members and national partners, submitted comments opposing proposed changes by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) that would weaken the Community Reinvestment Act (CRA). This landmark civil rights law requires banks to meet the credit needs of the communities where they do business, including historically underinvested and underserved communities.
Enacted in 1977 in response to redlining and discriminatory disinvestment, the CRA is one of the most important tools communities have to hold banks accountable to serving low- and moderate-income (LMI) populations. Strong CRA requirements help direct capital toward affordable housing, small businesses, neighborhood revitalization, and other investments that enable communities to build wealth and thrive.
National CAPACD, a longtime champion of the CRA, is deeply concerned that the proposed rule would move the CRA away from this purpose. Among other changes, the proposal would substantially reduce the number of banks subject to CRA mandates that create greater transparency and analysis of community development investments.
The proposal could significantly impact solutions to the housing crisis by discouraging banks from investing in affordable housing through the Low-Income Housing Tax Credit (LIHTC), the primary tool for developing affordable rental housing across the country. Board Member and Asian Community Development Corporation (ACDC) Executive Director, Angie Liou, shared, “The consequences of weakening the Community Reinvestment Act will be felt in neighborhoods where families are already struggling to find affordable places to call home. In Boston’s Chinatown, ACDC receives thousands of applications for far fewer available units in our affordable housing developments. We need more investment in affordable housing, not less. Yet the proposed changes to the CRA threaten to weaken the incentives for banks to make these investments, making it even harder for community-based organizations like ours to meet urgent housing needs.”
The proposed changes could also make it harder for Community Development Financial Institutions (CDFIs) to access critical resources to serve their communities and restrict the flexible operating support that nonprofits rely on to maintain staff and infrastructure. They would also reduce bank reporting requirements for small business and community development lending data, making it harder for communities to identify gaps in access to credit and hold financial institutions accountable.
National CAPACD CEO Seema Agnani states, “Financial institutions and community based organizations alike recognize the value of a strong Community Reinvestment Act (CRA). This is why National CAPACD and our coalition members have spent years advocating for a stronger CRA that holds banks accountable to the communities they serve. Through congressional testimony, public comments, and coalition advocacy, we have pushed for greater transparency, meaningful community input, and equitable access to capital for communities historically excluded from financial opportunity. At a time when the cost of living has become a central issue in our country and a housing crisis that has not only persisted, but worsened in many parts of the country- we need to continue to strengthen the CRA, not weaken it.”
National CAPACD urges the OCC and FDIC to withdraw the proposal and work with the Federal Reserve to develop a consistent CRA framework that strengthens, rather than weakens, investment in historically redlined and disinvested communities. CRA reforms should expand equitable access to capital and ensure that banks continue to support the affordable housing, small business, nonprofit, and community development infrastructure that communities need to thrive.