Over 100 California Community Organizations and Leaders Call for Banking Regulators to Stop Planned Revamp of Anti-Redlining Law during COVID19 Crisis
Worker, Housing, and Small Business advocates call on all resources to be dedicated to saving lives and responding to Coronavirus
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San Francisco--Amongst an unprecedented public health crisis that threatens hundreds of thousands of lives, as small businesses are shuttered across California and the nation, and as millions file for unemployment, advocates in California called for the banking regulators at the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) to end their proposed rulemaking that threatens to weaken the nation’s anti-redlining law.
Anti-Redlining Law Changes May Harm Low-Income Communities
In November of last year, the Trump administration’s appointed banking regulator, Joseph Otting of the OCC spearheaded changes that will significantly weaken the landmark anti-redlining law and harm low-income communities across the country. The Community Reinvestment Act (CRA), the law aimed at combating redlining, or racial bias in lending, requires banks to meet the needs of local communities where their branches are based, including low and moderate-income communities. The FDIC later joined the OCC in its proposed rewrite of CRA. The Federal Reserve has so far refused to join their efforts.
The California Reinvestment Coalition letter included support from over 100 community organizations and community leaders. Signatories included the Service Employees International Union, PolicyLink, National CAPACD, Consumer Federation of California, Opportunity Fund, CDC Small Business Finance, Housing Now, and National Fair Housing Alliance.
The letter states, “Our efforts are focused on responding to the current crisis and the huge economic and health impacts it is having and will continue to have on our communities. Family members and friends, clients and constituents, are worried about remaining healthy, paying rent, making mortgage payments, having a job to report to, keeping a small business open, and ensuring there is food on the table.”
“At a time when communities of color are more likely to contract and die from COVID19, the idea that Trump’s banking regulators would move forward with dismantling CRA, a landmark civil rights law, that will be essential to financial and economic recovery post crisis, is alarming. But to move forward knowing that communities are weakened and unable to comment fully as nonprofit organizations and residents work around the clock to help these same communities survive, is deeply undemocratic,” said California Reinvestment Coalition, Executive Director Paulina Gonzalez-Brito.
The letter also called for the OCC and the FDIC to use the full force of the federal government to focus resources on responding appropriately to the current health emergency gripping the nation.
The letter from leading California-based and California-serving community organizations and leaders, joins similar calls for a freeze on CRA rulemaking by the National Community Reinvestment Coalition, National Community Economic Development Association, the President’s Council on Impact Investing, and industry groups, including the Independent Community Bankers of America (ICBA).
The CRC letter to regulators can be found here: http://calreinvest.org/wp-content/uploads/2020/03/CA-orgs-urge-OCC-and-FDIC-to-end-CRA-rule-making.pdf
CRC’s A Bailout for the People COVID-19 Platform, can be found here: http://calreinvest.org/wp-content/uploads/2020/03/CRC-COVID-19-Demands.pdf