FRB Governor Brainard Discusses Consequences of COVID-19 on Housing and Inclusive Recovery

In remarks before the National Housing Conference National Advisory Council, Federal Reserve Board Governor Lael Brainard discussed the importance of the Community Reinvestment Act ("CRA") in motivating the development of minority and low- and moderate-income ("LMI") housing. She reported that households with limited resources have been hardest hit economically as a result of the COVID-19 pandemic, and that very significant percentages of Black and Hispanic renters were behind on their rent or mortgage payments. In light of the need for greater amounts of LMI housing, Ms. Brainard said that a revised CRA, as recently proposed by the Federal Reserve Board, will "help move the needle on credit access, wealth building, and the availability of community development financing." She concluded by providing details as to the benefits that the revised CRA regulations would provide, including improved metrics and a better definition of "affordable housing."

In a separate set of remarks titled "Achieving a Broad-Based and Inclusive Recovery," before the Society of Professional Economists, Ms. Brainard stated that "targeted fiscal support will be needed alongside accommodative monetary policy . . . [to achieve] a broad-based and inclusive recovery." She again emphasized that the COVID-19 pandemic had hit minority and poor communities the hardest, and that small businesses were finding it far more difficult to maintain and obtain credit than large firms.