WASHINGTON – On Monday, Congresswoman Hayes joined House colleagues in voting to pass H.J.Res 90, a resolution providing for congressional disapproval of a harmful rule submitted by the Office of the Comptroller of the Currency (OCC) to gut the Community Reinvestment Act. This landmark civil rights law protects against the discriminatory practice of redlining and ensures equal opportunity for low to moderate income Americans and people of color in mortgage lending.
“Today we are taking a stand against predatory actions that put the consumer protections of generations of communities of color at risk,” said Congresswoman Hayes. “It is unconscionable that the Office of the Comptroller of the Currency would use the guise of a global pandemic to weaken regulations that forbid discrimination against those seeking loans based on their racial or ethnic background. I stand against attempts to exacerbate the racial wealth gap in this country and have joined my colleagues in championing this important legislation.”
The Community Reinvestment Act (CRA) was first passed in 1977 and expressly instructs lending institutions to meet the credit needs of the communities in which they operate. Before its implementation, those seeking loans were consistently denied the necessary funding to finance property because of the color of their skin. This practice, known as redlining, is still pervasive in many places throughout this country, and weakening this law poses a direct threat to the progress made in recent decades. No person should be denied housing because of race or social status, and we must do more to bolster the protections this law enshrines.
The OCC’s new rule change would lower the standards lending institutions are required to meet under the CRA to be deemed as providing fair and adequate service to loan applicants.
This rule specifically:
• Creates different sets of rules for different banks. Both the FDIC and the Federal Reserve declined to join the OCC’s final rule, leading to possible regulatory arbitrage based on a bank’s charter when stakeholders have called for uniformity and a consistent application of the law across all banks.
• Relies on insufficient data to justify its purpose. The OCC did not collect adequate data or rely on sufficient commentary when writing this rule, making it difficult to assess whether new changes will drive more CRA dollars to communities in need.
• Centers on vague language and puts large deals over the needs of everyday families. The new rule puts a significant focus on how much money a bank loans, rather than the total number of loans they give, to determine CRA compliance. Combined with the OCC’s removal of a service test, which examines retail and community development services and is currently 25% of a CRA exam, this may lead to a decrease in bank branches in LMI communities and the number of loan applicants being helped.
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Rep. Jahana Hayes has been a public-school teacher in Connecticut for more than 15 years and was recognized in 2016 as the National Teacher of the Year.
Currently serving her first term in the U.S. House of Representatives, Rep. Hayes sits on the Committees on Education & Labor and Agriculture and proudly represents Connecticut’s 5th District.