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Billions at risk in proposals to weaken the Community Reinvestment Act

Billions at risk in proposals to weaken the Community Reinvestment Act

Washington, DC  – (RealEstateRama) — A new study released today by the National Community Reinvestment Coalition (NCRC) found that banking industry proposed changes to the Community Reinvestment Act (CRA) would allow midsize banks to circumvent federal requirements to lend and invest in low and moderate income neighborhoods.


These proposed changes would endanger billions in affordable housing and community development investment.

The Independent Community Bankers Association and other stakeholders have recommended proposals to eliminate or weaken the Community Development test within the CRA exam for midsize banks (approximately $300 million to $1.2 billion in assets).  Under the current requirements, they lend and invest nearly $3 billion annually for affordable housing and community development in low and moderate income neighborhoods.

NCRC’s new analysis concludes that eliminating the community development test or diminishing its rigor would result in at least a 50% decrease in community development lending.

“This is a concrete example of how technical changes to the Community Reinvestment Act could have a devastating impact to working class families and neighborhoods,” said John Taylor, President and CEO of the National Community Reinvestment Coalition.

“Just to put this into context, historically, Congress has appropriated $3 billion to the Department of Housing and Urban Development’s flagship community development grant program, the Community Development Block Grant (CDBG). CDBG funds are allocated to states for local community development activities such as affordable housing and infrastructure development. Weakening this test within the CRA exam for midsize banks is like eliminating CDBG funding. We must stay vigilant, and ensure these proposed changes are not enacted into law.”

The Administration’s budget proposals to eliminate CDBG funding paired with dramatic changes to CRA exams for mid-size banks would be a double whammy for struggling communities, rural and urban, and would cost them about $6 billion in private and public financing annually.

To read the full study, please click here (link).


About NCRC

NCRC and its grassroots member organizations create opportunities for people to build wealth. We work with community leaders, policymakers and financial institutions to champion fairness in banking, housing and business development.


The National Community Reinvestment Coalition (NCRC) was formed in 1990 by national, regional, and local organizations to develop and harness the collective energies of community reinvestment organizations from across the country so as to increase the flow of private capital into traditionally underserved communities. 

NCRC has grown to an association of more than 600 community-based organizations that promote access to basic banking services including credit and savings, to create and sustain affordable housing, job development and vibrant communities for America's working families.


727 15th Street, Suite 900
Washington DC 20005

Phone: 202 628-8866
Fax: 202 628-9800

Media contact:
Jesse Van Tol
Phone: (202) 464-2709

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