WASHINGTON, DC –Today U.S. Sen. Cory Booker (D-NJ), along with Sens. Jeff Merkley (D-OR), Ron Wyden (D-OR), Barbara Boxer (D-CA), Harry Reid (D-NV), Kirsten Gillibrand (D-NY), Barbara Mikulski (D-MD), Ben Cardin (D-MD), Richard Durbin (D-IL), Mazie Hirono (D-HI), Dianne Feinstein (D-CA), Gary Peters (D-MI), Charles Schumer (D-NY), and Patty Murray (D-WA) sent a letter to Janet Yellen, Chair of the Board of Governors of the Federal Reserve System, Martin J. Gruenberg, Chairman of the Federal Deposit Insurance Corporation, and Thomas Curry, Comptroller of the Currency Office of the Comptroller of the Currency, expressing concerns about the current implementation and enforcement of the Community Reinvestment Act (CRA) and to urge updates to the regulatory framework that supports the implementation of the law.
The CRA was first passed by Congress in 1977 with the goal of encouraging banks to provide essential services to low-and-moderate income communities across the country and to combat harmful redlining practices. Under the CRA, regulators systematically review banks and award them CRA credit for providing vital financial services in the communities in which they are chartered. Since the CRA was enacted, millions of Americans have received loans that help improve their livelihoods, and banks have extended loans to over 22 million small businesses in low-and-moderate income census tracts to help them grow and thrive.
“As we approach the 40th anniversary of the passage of the Community Reinvestment Act (CRA), we write to express our deep concerns, which reflect issues brought to our attention by both consumers and banks, about its current implementation and enforcement. The recent clarification through the Interagency Questions and Answers Regarding Community Reinvestment and review through the Economic Growth and Regulatory Paperwork Reduction Act have served as opportunities to improve the enforcement of the CRA and clarify how banks can comply. However, greater modernization of the regulations are needed given the tectonic shifts that have occurred in the financial landscape,” the senators said.
“…..the Community Reinvestment Act is an important tool for ensuring that underserved communities can borrow for everything from home purchases to small business origination. As active bank branches have decreased—due, in part, to economic factors—and technology platforms have proliferated, it has become imperative that regulators retool and update the CRA.”
“Given the changing banking landscape, we also have some concerns about the ‘assessment area’ that covered institutions are required to service. While we agree that it is vital that banks continue to serve the community in which they are chartered, we hope to address the increase in banking deserts and the rise of fintech, including online lending,” the senators continued.
The full letter can be viewed here.