Last week, Comptroller of the Currency Joseph Otting released an Advanced Notice of Proposed Rulemaking (ANPR) on the Community Reinvestment Act of 1977 (CRA), the first step in what is likely at least a yearlong regulatory process.
While the Office of the Comptroller of the Currency (OCC) can act alone, it is only one of three regulators that enforces CRA, along with the Federal Reserve Board of Governors and the Federal Deposit Insurance Corporation. Ultimately, real reform must have the support of all three regulators along with the communities that CRA is meant to serve. The OCC’s ANPR is an important start to a process that if done right, can make CRA more effective. But if it’s done wrong, it could be devastating to many underserved communities and the organizations, both for-profit and nonprofit, that create much-needed affordable housing.
I have been very clear to both Comptroller Otting and other Treasury Department officials involved in CRA modernization that effective and sustainable reform must meet four fundamental tests. It must:
- Increase investment in communities that are currently underserved;
- Benefit more low- and moderate-income people, particularly people of color, who live in those communities;
- Ensure that CRA lending and investment does not lead to displacement of the very people it is meant to help; and
- Make both bank performance and government enforcement more transparent and predictable.
Most banks have long ago learned to appreciate the value of CRA, though they are often frustrated by the how it is applied, as are many affordable housing advocates. We want CRA compliance to be fair, timely and accurate, and so do they. I am optimistic that this process will result in a strengthening of the effectiveness of CRA through sensible improvements if we do it right.
NHC has convened a CRA Working Group made up of interested members. It’s not too late for you to participate. If you are not an NHC member, you can join now at a reduced rate. Just contact Amanda Mitchell at email@example.com to learn more about joining, or to sign up for the CRA Task Force if you are already a member.
NHC is holding our Solutions for Affordable Housing 2018 convening on November 27-28, just three weeks after the election. Solutions will include an Advocacy Day on Nov. 28 while both current and newly elected members of Congress are in town. The agenda will include A-list speakers and panels on housing production, CRA modernization and housing finance reform, among others. We are especially grateful to JPMorgan Chase, Bank of America and Wells Fargo for their significant support of this important convening. Several outstanding sponsorship opportunities remain available.