September 20, 2022

House Financial Services Committee Chair Introduces Bill to Strengthen the CRA

House Financial Services Committee Chair Maxine Waters (D-CA) proposed amendments to the Community Reinvestment Act in an effort to (i) end modern-day redlining, (ii) root out discrimination in the banking system and (iii) close the gaps in racial wealth and homeownership.

The Making Communities Stronger through the Community Reinvestment Act would:

  • establish criteria for determining credit for any community service performed by the executives, board members or employees of a financial institution;

  • provide considerations for penalties for engaging in illegal or discriminatory practices;

  • require certain financial institutions to form a Community Advisory Committee responsible for monitoring community investment and engagement;

  • detail criteria for determining financial institutions' performance in small farm loans and other small businesses in partnership with non-depository lenders;

  • encourage facilitation of home mortgage lending targeted to low- and moderate-income borrowers in a safe and sound manner; and

  • require regulators to conduct studies on discrimination and disparities in access to credit within two years of enacting the bill and every two years thereafter.

Representative Waters stated that the bill is endorsed by the Association for Neighborhood and Housing Development, California Reinvestment Coalition, National Alliance of Community and Economic Development Associations, National Community Reinvestment Coalition, National Coalition for Asian Pacific American Community Development, ProsperityNow and UnidosUS.

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