CRA Reform

August 5: Today, Woodstock Institute & the Illinois CRA Coalition submitted our comments on proposed rules for an interagency Community Reinvestment Act (CRA) reform process.

The long-awaited Notice of Proposed Rulemaking (NPR) represents the most recent of many stalled efforts to update this anti-redlining law. Woodstock Institute like other organizations weighed in on the proposed rule by responding, in detail, to 180 questions posed for review.

As we note in our comment on the NPR, we are enthusiastic about the prospects for reforming CRA. However, prior to release of the NPR hopes ran high throughout the community and economic development industry that the agencies were finally prepared to explicitly address race in the CRA and incorporate it into the examination process.

It was with heartbreaking disappointment that we saw the 678-page NPR … offered no suggestions on how to integrate race into the exam process. The furthest that the agencies went was to propose incorporating Home Mortgage Disclosure Act (HMDA) data in published performance evaluations, but without considering the findings of this data in the assessment of an institution’s ratings.

Woodstock Institute Comment on Interagency Notice of Proposed Rulemaking (NPR) on the Community Reinvestment Act (CRA), Aug. 5, 2022

In addition to our own comment letter, 31 organizations including Woodstock Institute signed on to a comment letter from the Illinois CRA Coalition. Their comment letter focused on 6 broad areas within the reform proposal: (1) the role that CRA should play in promoting racial equity; (2) how the agencies balance the interests of CRA stakeholders; (3) evaluations; (4) community engagement; (5) community development; and (6) small businesses.

Both comment letters are available here for download.

Background

In May, the Federal Deposit Insurance Corporation (FDIC) announced the release of a Notice of Proposed Rulemaking (NPR) on the regulations implementing the Community Reinvestment Act (CRA). The federal CRA, passed in 1977, is a key tool for combating the legacy and effects of redlining and disparities in lending. Woodstock Institute played a leading role in advocating for this law when it initially passed and it remains one of our top policy priorities. 

Learn more about Woodstock’s past work on the federal and state CRAs here and here. More background on the power and potential of CRA from our national allies NCRC on their #TreasureCRA campaign web page.