Supporting the Community Reinvestment Act

Adopted at the 87th Annual Meeting in 2019

  • WHEREAS, the Community Reinvestment Act (CRA) was enacted on October 12, 1977 to end the practice of "redlining" by financial institutions where they would draw a red line on a map around the neighborhoods they did not want to offer financial services; and,

    WHEREAS, before the enactment of the CRA, redlining made it near impossible for low-and moderate-income Americans, racial and ethnic minorities, and their neighborhoods to access credit services, such as mortgages and business loans, regardless of their qualifications or creditworthiness; and

    WHEREAS, CRA was a landmark civil rights law passed in 1977 to end discrimination that was once common in America's banking and housing markets; and

    WHEREAS, discrimination in lending is still a problem; and

    WHEREAS, the CRA states that "regulated financial institutions have continuing and affirmative obligations to help meet the credit needs of the local communities in which they are charted"; and

    WHEREAS, the CRA establishes a regulatory regime for monitoring the level of lending, investments, and services in low- and moderate-income neighborhoods traditionally underserved by lending institutions; and

    WHEREAS, the federal agencies conducting CRA examinations are: the Office of the Comptroller of the Currency (OCC), which examines nationally chartered banks and the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board €" both of whom examine state-chartered banks; and

    WHEREAS, since 1996, according to analysis of bank lending data by the National Community Reinvestment Coalition (NCRC), CRA-covered banks issued more than 27 million small business loans in low-and moderate-income tracts, totaling $1.093 trillion, and $1.076 trillion in community development loans that support affordable housing and economic development projects benefitting low- and moderate-income communities; and

    WHEREAS, the annual dollar amount of community development loans increased 443 percent from $17.7 billion in 1996 to $96 billion in 2016 review of the CRA examinations of intermediate small banks (ISBs)/mid-sized banks (banks with asset sizes today between $313 million and $1.252 billion) found that ISBs produced over $9.3 billion of community development (CD0 loans and grants; and

    WHEREAS, despite the tremendous benefits of CRA to communities, the full potential of CRA has not been realized because it has not been updated to take into account changes in the banking industry and the economy; and

    WHEREAS, independent mortgage companies not covered by CRA now make more than 50 percent of the home mortgage loans in America and financial technology companies not covered by CRA operating via the internet are rapidly increasing their lending; and

    WHEREAS, some federal regulators are considering ideas that would substantially weaken the law;

    THEREFORE BE IT RESOLVED, that the U.S. Conference of Mayors support efforts to modernize CRA, and oppose any legislation or regulation that would undermine the law's goal and intent; and

    BE IT FURTHER RESOLVED, that the U.S. Conference of Mayors supports federal legislation such as H.R. 1737/S.787, the American Housing and Economic Mobility Act, which serve as an example of proposals that will strengthen the CRA by covering more financial institutions, promoting investment in activities that help both low- and moderate-income and traditionally underserved communities, as well as strengthening sanctions against institutions that fail to follow the rules.

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