[1]Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services introduced H.R. 8833 on September 15 [2], known as the “Making Communities Stronger Through the Community Reinvestment Act [3].”
This transformative piece of legislation is a part of Chairwoman Waters’ continuing efforts to root out discrimination in our modern-day banking system and close the racial wealth and homeownership gaps by making key reforms to the Community Reinvestment Act (CRA). Congress passed the CRA in 1977, but after nearly 45 years, the law has not kept up with changes in the banking system and is in need of reform to ensure that banks serve communities that have been historically redlined and left behind by our financial system.
“More than 40 years ago, Congress passed the CRA in response to racist policies in banking and lending that excluded Black homebuyers and renters from affordable housing options and robbed Black families of the opportunity to build wealth through the American dream of homeownership. Unfortunately, even after so many years, there’s been very little progress,” said Chairwoman Maxine Waters. “That’s why I introduced the ‘Making Communities Stronger Through the Community Reinvestment Act.’ This bill will hold banks accountable to the local communities where they have branches or do most of their lending, and make crucial updates to ensure they are providing equal access to affordable credit, investing in the communities they serve and doing their part to close the widening racial-wealth gap. We can’t wait any longer.”
Specifically, this bill will make updates to the current CRA by:
- Ensuring bank services, loans and investments are meaningful and responsive to the needs of low- and moderate-income communities and communities of color;
- Providing local communities with more of a say on banks’ CRA exams and activities;
- Requiring CRA examiners to consider all unlawful activity on banks’ CRA exams;
- Requiring CRA exams to evaluate bank lending done in partnership with non-banks and fintechs;
- Encouraging lenders to make more small-dollar mortgages, specifically those under $100,000; and
- Building a strong record of data to better identify ongoing discrimination or racial disparities and provide a pathway to consider this information on bank exams in the future.
To read the full release, including more background and commentary from Congresswoman Maxine Waters, click here [2].