Here we share a 2022 article by longtime CRA expert Cal Bradford showing that race is central to the Community Reinvestment Act.

Executive Summary

Some have put forth the spurious argument that because the text of the Act does not specifically identify the consideration of “race” that such an analysis should not be part of the examination.1Here and in all other references in this article, “race” includes both race and ethnicity.

This review shows that the prudential regulatory agencies have been singled out for decades under the Fair Housing Act (FHA) with an affirmative obligation to protect racial groups and areas as well as the other protected classes from discrimination in the mortgage markets. Moreover, after 1974, these agencies have been responsible for protecting the racial groups and the other protected classes under the Equal Credit Opportunity Act (ECOA) which covers all aspects of credit practices including both personal and business transactions.

The prudential regulators recognize the CRA as part of a battery of civil rights laws designed to combat discrimination. The CRA regulations (both existing and as proposed under the May 5, 2022, Notice Proposed Rulemaking (NPR) by the Federal Reserve Board (Fed), the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) create a special section in the CRA examination process to consider evidence of discrimination and other illegal acts before assigning a rating for an examination. Therefore, the prudential regulatory agencies have the clear legal authority and the affirmative obligation to consider race in the CRA examination process.

The prudential regulatory agencies have long established fair lending examination procedures to identify discrimination. The examination procedures cover a wide range of practices including geographic racial redlining, as well as discrimination in access to financial products and services.

Any omission of the consideration of race is due to a failure on the part of the regulators to fulfill their legal obligations in oversight and enforcement of the Fair Housing Act, the Equal Credit Opportunity Act and the Community Reinvestment Act. The sections of this brief trace these legal requirements and enforcement mechanisms in the CRA process from the passage of the Fair Housing Act to the current time.

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