The Trump Administration is working to roll back basic civil rights protections and open the door for housing discrimination. A series of recent attacks makes this clear, including a proposal to weaken the Community Reinvestment Act (CRA).
The proposed changes to CRA would redirect billions of dollars in lending and investment away from low-income and minority communities.
Currently, banks meet their CRA requirements by providing capital for affordable housing, small businesses, and economic development in low- and moderate-income communities.
Now, a Trump administration appointee is proposing CRA rule changes that could redirect these funds to sports stadiums, roads, bridges, and other infrastructure projects. The proposal would make redlining legal again by permitting banks to avoid investment in low-minority neighborhoods. It would make banks far less accountable and connected to the communities they are required to serve.
Points you may want to emphasize in your comment, which Housing Action believes are of particular importance:
- Proposed changes, such as having a list of CRA-approved activities and a bank’s ability to broaden its assessment area, will result in significantly less investment in low- and moderate-income communities, as banks will be incentivized to focus on activities on that pre-approved list and in higher-income communities.
- Under the proposed rule change, the definition of affordable housing will be relaxed to include middle-income housing in high-cost areas. Combined with the proposed broadening of assessment areas, this will result in funding less housing for those with the most severe housing needs.
- The proposed single evaluation measure (the “one ratio”) will encourage banks, in an effort to limit overhead expenses, to satisfy their CRA obligations by reducing the number of CRA-qualifying projects and focusing on projects with a big price tag. The incentive to engage in smaller, more targeted community development loans, investments, and grants based on community needs and desires would disappear.
- The overall impact would be to the return of redlining—the systematic denial of lending, investment, and other banking services to residents of communities of color. Meeting local needs in communities that have been historically discriminated against is supposed to be foundation of the CRA.
Please take the time to speak up and oppose the proposed rule change. The number of comments, especially if personalized with even one additional sentence, really matters!
Together, we can make a difference.