Urges federal agencies to go even further in regulatory reform measures to help address persistent racial and economic disparities exacerbated by the pandemic
OAKLAND – California Attorney General Rob Bonta today led a coalition of 19 attorneys general in a comment letter in support of a joint effort by the Federal Reserve Board of Governors, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency to revise and strengthen regulations under the Community Reinvestment Act (CRA). The CRA is a key civil rights law enacted by Congress to prevent racially discriminatory redlining in housing and encourage banks to help meet the credit needs of all segments of their communities, including neighborhoods and individuals. low and moderate income (LMI). In the comment letter, the coalition expresses its support for the rule proposed by federal agencies and urges them to go even further in implementing reforms to help address the persistent racial and economic disparities exacerbated by COVID-19 .
“For too long, low-income Californians and people of color have been denied fair access to credit to buy a home or open a business,” said Attorney General Bonta. “As the Community Reinvestment Act aims to protect communities by directly addressing the lingering legacy of redlining and racial inequality in our financial system, it is essential that we strengthen it. Through this regulatory process, we have a unique opportunity to help ensure that our institutions are better able to meet the financial needs of all Americans. I urge the federal government to take all necessary steps to ensure we have all the tools available to combat the continuing threat of systemic discrimination and support the well-being of our families and neighborhoods across the country.
Since the CRA was passed by Congress in 1977, it has helped redirect trillions of dollars of investment to IMT communities, improving access to financial services and loans that encourage the availability of affordable housing and support small enterprises. In the comment letter, the coalition supports many aspects of the proposed rule and proposes additional measures to help ensure that regulators have the tools they need to achieve the ARC imperative – that financial institutions be to meet the needs of the most vulnerable communities. This imperative has never been more important. In previous comment letters, states have expressed concern that the widening racial wealth gap resulting from historic redlining will be exacerbated by an uneven recovery from the pandemic. Now, two and a half years after the start of the COVID-19 crisis, states are facing an affordable housing crisis, rising homelessness and housing insecurity, and historic levels of inflation that disproportionately threaten low-income and poverty-stricken communities. color. CRA regulatory reform can play a key role in addressing these challenges.
Thus, in the comment letter, states encourage agencies to focus on:
- Ensure that rulemaking justifies the CRA’s primary goal of addressing racial inequality;
- Raising the regulatory bar to ensure banks take meaningful steps to meet the needs of the IMT community; and
- Leverage incentives to encourage the development of affordable housing for IMT communities without displacement.
In filing the letter of comment, Attorney General Bonta is joined by the attorneys general of Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Washington and the District of Columbia.
A copy of the comment letter is available here.