We are counting on you to lift your voice to push back against potentially harmful changes to the Community Reinvestment Act (CRA). CRA is a landmark civil rights law to end discrimination that was once common in America’s banking and housing markets.

While some strides have been made, the lack of investment in low-income areas and communities of color remains a persistent concern. Even still, regulators have proposed ideas that may substantially weaken the law via an Advanced Notice of Proposed Rulemaking (ANPR).  We need you to speak up to ensure CRA is strengthened, not weakened. 

We only have until Nov. 19 to comment on these ideas and urge regulators to consider CRA reforms that more effectively hold banks accountable for equitable investments and help them more flexibly respond to community needs.

In order to simplify the process, we have drafted a letter at the end of this email for our members to use that outlines our concerns and suggestions.

• Please open a new document, paste the draft letter, just add in your personal and organizational details in the sections in bold as appropriate.

• Where the data by congressional district is referenced, please refer to the table below. If you do not know your district,click hereto find it!

• Lastly, follow this link directly (https://www.regulations.gov/docket?D=OCC-2018-0008), click "comment now" to upload your document and then submit it!

Thank you for your advocacy. There is power in community voices coming together to protect critical resources and push for urgently needed reforms. For more background on CRA basics, the proposed changes and our concerns related to ANPR, click here to find the PowerPoint presentation from our joint NCRC-Prosperity Indiana webinar.

For questions, contact Kathleen Lara at klara@prosperityindiana.org.

Congressional District    Current Representative 

1                                       Pete Visclosky

2                                      Jackie Walorski

3                                      Jim Banks

4                                      Todd Rokita

5                                     Susan Brooks

6                                     Luke Messer

7                                     Andre Carson

8                                     Larry Bucshon

9                                     Trey Hollingsworth

DRAFT LETTER

(Date)
Comment regarding “Reforming the Community Reinvestment Act Regulatory Framework”

RE: Docket ID OCC-2018-0008

(Name of Your Organization) appreciates the opportunity to comment regarding the Office of the Comptroller of the Currency’s (OCC) Advance Notice of Proposed Rulemaking (ANPR) regarding the Community Reinvestment Act (CRA). Since 1996, banks have issued almost $2 trillion in loans and investments in low- and moderate-income communities, ensuring more individuals have the opportunity prosper and become homeowners, more businesses receive loans to grow and thrive, and more community development organizations can expand their work to revitalize neighborhoods. CRA is a critical tool to address equity in lending, access to credit, and investments in underserved communities.

(Your organization’s name) is based in (city or neighborhood), and (describe services and mission). In carrying out this work, it is clear how CRA has motivated banks to provide loans and investments for affordable housing and economic development in areas and/or for projects that would otherwise not receive this critical capital. (Describe here in a few sentences an example of CRA financing that has addressed a critical need and/or is innovative.)

With that in mind, (Name of Your Organization), has strong concerns about how the proposed changes weaken regulators’ and communities’ ability to ensure CRA-related investments are indeed responsive to community needs. The OCC’s proposal significantly diminishes the importance of assessment areas on CRA exams, which are essential in combating lending inequities. Using data collected from the CRA and the Home Mortgage Disclosure Act (HMDA) from 2012 through 2016 to examine loan volumes, the National Community Reinvestment Coalition (NCRC) estimates that if these proposed changes were to be implemented, the losses in mortgage and small business loans in low- and moderate-income (LMI) census tracts would be between 10 and 20 percent. In Indiana, that would mean LMI neighborhoods could lose up to $1.28 billion in home and small business lending nationally over a five-year time period. In the Congressional district in which we operate, the loss would be (insert the appropriate data from the table above).

Specifically, we are concerned that an OCC idea, commonly called the one ratio, would make CRA exams considerably less effective in evaluating how banks are meeting local needs, particularly in hard-to-serve areas that are economically divested in very rural or urban areas. The one ratio would consist of the dollar amount of a bank’s CRA activities (loans, investments, and services to low- and moderate-income borrowers and communities) divided by the bank’s assets. The ratio is supposed to reflect CRA effort compared to a bank’s capacity.

This approach cannot tell an examiner, a bank, or a member of the public how responsive a bank is to its various service areas. Currently, CRA exams evaluate and rate bank performance in assessment areas where banks have branches, and examiners are required to solicit and consider comments from community members about performance in assessment areas. This is central to the intent of CRA because these public comments offer insight on the practical impacts of CRA investments or areas for improvement. The one ratio replaces assessment areas or significantly diminishes the importance of assessment areas and public input on CRA ratings. Regulators must not devalue the public input process or weaken standards; rather, they should increase communication between all stakeholders about ways to more effectively meet community needs.

(Add any details about how your organization has engaged banks and/or CRA examiners in discussions about local needs and proposed financing and/or bank lending. Describe how these discussions may be diminished if assessment areas become less important on CRA exams.)

Additionally, we agree that changes in banking and technology require innovation to increase services to communities in need, but research has shown that low- and moderate-income consumers rely on branches for access to loans and banking services. This is a critical tool to combat reliance on predatory lending operations that are often pervasive in divested communities and disproportionately impact communities of color. If CRA exams dropped branches from consideration, the amount of lending and bank services in low- and moderate-income neighborhoods would decrease significantly. (Add your experience about bank branches in lower income neighborhoods or helping your modest income clients who are unfamiliar with banks get loans via bank branches).

Accordingly, the proposal’s discussion of the need to expand CRA exams to assess bank lending in areas beyond bank branches does so in support of the one ratio concept. Instead, the OCC should establish assessment areas for geographies where banks do not have branches but engage in a significant amount of business to gain a better understanding of service needs and opportunities in those areas.

Regarding the question within the ANPR about whether CRA consideration should be broadened for additional activities and populations, consumer and community development advocates like (Your Organization Name) have significant concerns that this would allow financing of CRA-eligible projects that do not directly serve low- and moderate-income neighborhoods and populations. By awarding points for financing or activities that do not address lack of access to banking or community development needs in lower income neighborhoods, the CRA’s mission of addressing inequality and redlining will be diluted.

In terms of expanding populations served by CRA, CRA exams must evaluate lending and services to people and communities of color. Since racial disparities in lending persist, it is essential that CRA must include lending, investing, and service to people and communities of color in its evaluations. The Joint Center for Housing Studies of Harvard University’s 2018 State of the Nation’s Housing report noted that the homeownership rate between black and white Americans is widening nationally. “Between 1994 and 2016, black homeownership rates increased just 0.3 percent while white rates rose 2.2 percent, widening the black-white gap to 29.2 percent,” according to the report.

(Add your thoughts and experiences related to serving communities of color and addressing racial disparities in lending).

One important way to more effectively address lending disparities would be for regulators to consider whether mortgage servicing companies, credit unions and insurance companies should also be subject to CRA-style exams. We suggest requesting public comment on this approach, which has long been a discussion among community development advocates who recognize we need to broaden CRA applicability to more ably address lending inequality.

To summarize, (Your Organization) agrees that CRA modernization is essential, but only in ways that boost lending and access to banking for underserved communities. We agree that CRA ratings must be reformed, but in ways that foster more inclusive investments, not contract current obligations. We also urge regulators to examine assessment areas that include geographies outside of bank branch networks in which banks make high volumes of loans. In order to continue working towards greater equity in lending, we urge regulators to examine lending and services to people and communities of color. Lastly, (Your Organization) believes the one ratio approach will diminish the importance of branches, assessment areas, and public input and result in a decrease of lending and access to banking in the communities that need it the most.

Investments through CRA are catalytic to divested markets and neighborhoods. These investments and capital infusions are often the first-in dollars, meaning it drives rehabilitations, loans, and developments that then spur broader market interest, resulting in larger scale revitalization and quality of life improvements. We urge the OCC to work with national, state and local consumer and community advocates to enact the kinds of reforms needed to ensure more individuals, businesses and communities can access credit, capital and opportunity.

Thank you for your thoughtful consideration of these comments.

Sincerely,

(Your Name)