Expand the Community Reinvestment Act

While the world of financial services has changed significantly since 1973, the Community Reinvestment Act has not. Woodstock Institute advocates to modernize CRA for today’s financial landscape.

July 29, 2010

As Woodstock President Dory Rand noted, there is still much left to be done to ensure a fair and equitable financial system, even though the Dodd-Frank Act is now law. One major step is to modernize the Community Reinvestment Act (CRA) so that all financial institutions are serving the entirety of communities in which they do business. The Chicago area has an opportunity to influence this process on August 12, when the Federal Reserve will be holding a hearing to consider CRA modernization. It is critical for regulators to hear from a large variety of organizations about why we must ensure that good products are available in every community – including low-wealth communities and communities of color.

July 16, 2010

The Community Reinvestment Act (CRA) should be updated give financial institutions credit for activities that support, enable, or facilitate projects carried out under the Neighborhood Stabilization Program (NSP), says a recent public comment letter submitted by Woodstock Institute.

July 9, 2010

The Community Reinvestment Act (CRA) has been an effective tool that has been used over the past 30 years to ensure that banks are meeting all the credit needs of the communities they serve, particularly low- and moderate-income (LMI) communities.  It has been used to improve access to low-cost mortgage credit in underserved markets, promote the provision of sustainable financial services tailored to low- and moderate-income consumers, and encourage sound investment in underserved communities who badly need it.  However, many questions have been raised about how CRA can be used to meet one of the most pressing needs facing communities today—helping families avoid foreclosure when possible.

May 13, 2010

A report released by a multi-state collaboration of regional research, policy and advocacy organizations documents the dramatic decrease in low-cost home loans made between 2006 and 2008, and highlights that communities of color were hardest hit by the drop-off in lending.

April 23, 2010

In the wake of the foreclosure crisis, safe and sustainable credit will be necessary to revitalize neighborhoods, especially in those communities that have been hardest hit. The Community Reinvestment Act (CRA) has driven trillions of dollars of safe and sound credit into low-wealth communities since its enactment in 1977. Experts from the National Community Reinvestment Coalition (NCRC), the National Urban League, National People’s Action, and more made the case at a House Financial Services Committee hearing on the CRA that expanding and modernizing this critical tool would help get America back on the path to recovery. Currently, the CRA Modernization Act of 2009 contains the important provisions critical to updating and expanding the CRA, although we expect a revised bill to be released this year.

April 15, 2010

As some of us scramble to file our income tax returns, others have long since filed. Unfortunately, many lower-wealth tax filers who need the assistance of tax preparers got ripped off with high-cost preparation fees and refund anticipation loans, or RALs – to the tune of $114 million in Illinois in 2006 alone. Faster delivery of refunds by the Internal Revenue Service and a little patience by tax filers can eliminate the demand for RALs, but many will still need the assistance of tax preparers to file their returns. How can tax filers pay for tax preparation services without getting caught up in RALs?

April 6, 2010

Woodstock Institute staff and members of the Illinois Community Investment Coalition (ICIC) left a big impression at last month’s National Community Reinvestment Coalition Annual Conference. Woodstock President Dory Rand, Senior Vice President Geoff Smith, and Vice President Tom Feltner shared Woodstock’s expertise with community investment advocates from across the country as presenters on panels with topics inlcuding strategies to influence elected officials, foreclosure prevention, and promoting sustainable lending.

April 1, 2010

Safe, sustainable mortgage lending is an essential ingredient for an economic recovery, and Woodstock Institute’s Online Community Lending Fact Book answers the question on everyone’s mind: “When will lending pick up, and where?”

April 1, 2010

Safe, sustainable mortgage lending is an essential ingredient for an economic recovery, and Woodstock Institute’s Online Community Lending Fact Book answers the question on everyone’s mind: “When will lending pick up, and where?”

March 15, 2010

Senate Banking Committee Chairman Chris Dodd (D-CT) released the Restoring American Financial Stability Act of 2009 today. Woodstock Institute believes the bill contains important provisions that will protect consumers and prevent the risky lending and abusive practices that led to the financial crisis. Sen. Dodd’s proposal will create a Consumer Financial Protection Bureau to crack down on the most egregious abuses from big banks and allow states to act as first responders to stop problems before they escalate.

March 10, 2010

Financial reform is at a critical juncture in Washington. The House has already passed a bill to create a strong and independent Consumer Financial Protection Agency (CFPA) to put consumers’ interests over those of Wall Street and crack down on the risky lending that spurred the financial crisis. However, Senate Banking Committee Chairman Chris Dodd (D-CT) continues to compromise the agency’s independence in the interest of bipartisan support.

March 3, 2010

So many of us—families and businesses—are struggling to pay our bills during these difficult times.

February 9, 2010

While Woodstock Institute is deeply engaged in national and local efforts to implement financial reforms, we also have occasion to explore financial issues with colleagues around the globe. Most recently, I was invited to participate in conversations surrounding community reinvestment issues in France. As a result of a meeting held in Paris on January 30, French bankers, non-governmental organizations (NGOs), economists, and other decision makers are considering pursuing laws similar to the United States’ Home Mortgage Disclosure Act (HMDA) and Community Reinvestment Act (CRA).

January 7, 2010

Federal Reserve Chairman Ben Bernanke started the new year with a reflective address to the American Economic Association on the causes of the financial crisis and steps to prevent a future crisis. Chairman Bernanke strongly stressed the need for “better, smarter” regulation and concedes that the Fed’s attempts at regulating the mortgage lending market were too little, too late. “Stronger regulation and supervision aimed at problems with underwriting practices and lenders' risk management would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates,” Bernanke said.

November 10, 2009

The regulatory reform proposal released today by Chairman Dodd (D-CT) goes a long way to ensuring that consumers and communities across the country have access to safe, affordable, and sustainable financial products.   We believe that the proposal brings us closer to ending the assumption that some financial institutions are too big to fail, protecting the financial system against systemic risk, creating a single federal banking regulator, and enforcing the consumer protections that have gone unenforced for far too long.  

October 16, 2009

The Chicago Tribune recently reported on American Union Savings & Loan Association’s objection to receiving a poor rating under Community Reinvestment Act (CRA) from the FDIC, its regulator.   American Union’s claim—that “reckless lenders attract [mortgage] applications and get favorable CRA ratings [and] these applications turned into bad loans”—is one that has been widely discredited by banking regulators and researchers.

Tags: CRA
May 6, 2009

The Federal Reserve Bank of Dallas’ recent report entitled “The CRA and Subprime Lending: Discerning the Difference” concludes that the Community Reinvestment Act “is unequivocally not to blame for the housing market’s fall. The numbers just don’t add up.” Moreover, data from the Board’s staff report suggest that the CRA prevented the subprime situation from being more severe.

Tags: CRA