No Community Reinvestment Act, No Community Development: Proposed Changes to the CRA

Housing and Transportation

In the 1930s, redlining took over the American lending system: bankers picked lending-free areas (largely based on race) and drew virtual lines around neighborhood maps. Today, the practice is considered discriminatory because it predominantly impacted poor, black neighborhoods. Due to lack of investment, neighborhoods saw little economic growth, and in many cases, remain impoverished. This practice continued through the 1970s, until the Community Reinvestment Act passed in 1977.

Over the last four decades, the CRA has led to fair and equitable access to capital in disenfranchised areas throughout the country by encouraging banks to serve their local communities. Of the 25 largest banks in the U.S., annual community investment averaged $35 billion dollars. Since the inception of CRA, total investment is about $2 trillion dollars.

In December 2019, the Office of the Comptroller of the Currency proposed reforms to the CRA in an attempt to modernize practices. These reforms have since been widely criticized for attempting to weaken the impact of the CRA.

In this episode of the Doorsteps podcast, Dr. Cody Price talks with Nate Coffman, executive director of the Ohio CDC Association, a non-profit trade association for community development corporations that work to revitalize rural and urban communities. Nate shares the history and impact of the CRA, a breakdown of the proposed reforms, and how to submit public comment by the April 8 deadline.

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The views and opinions expressed in Doorsteps are those of the individuals involved and do not necessarily reflect those of the Ohio Housing Finance Agency.