As reported in our January newsletter, changes proposed by the Trump administration to the Community Reinvestment Act (CRA) would threaten the very heart of the law and result in substantial consequences for community developers.

The Office of the Comptroller of the Currency (OCC) and FDIC would lessen the public accountability of banks to their communities by enacting unclear performance measures on CRA exams that would not accurately measure a bank’s responsiveness to local needs. Contrary to the agencies assertions that their changes would increase clarity and CRA activity, the result will be significantly fewer loans, investments and services to low- and moderate-communities (LMI).

This is a “deeply misconceived proposal that would fundamentally undermine and weaken the Community Reinvestment Act,” according to former FDIC Chairman Martin Gruenberg.

Taking Action

We urge your organization to submit comments by the new deadline of Wednesday, April 8. All who care about holding banks accountable to lend and provide services equitably and support community development where they do business are urged to inform themselves and write individual and organizational letters to the OCC and their representatives in Congress.

Tools to submit letters – National Community Reinvestment Coalition (NCRC) has helpful guides for customizing letters as well as short and long format letter templates.

Submit comments here – OCC’s official page

  1. When you get there, copy/paste your text into the comment box orif you exceed the word limit you can attach your letter as a .docx, .jpeg or .pdf.
  2. Add your contact information, check the box to acknowledge your comment will be made public, and click the green button that says “submit comment.”
  3. You will then be directed to a confirmation page that indicates your comment was submitted successfully. This also gives you your official comment number. Your comment will also appear online within a few business days.
  4. After you’ve submitted your comment online, there’s one more step. Please also send your comment by email to the FDIC. There is a possibility that the two agencies may issue separate and different final rules so we want to make sure your comments are officially received by both. Send your comment by email the FDIC at:
  5. Include the RIN 3064-AF22 on the subject line of the message.
  6. CC your comments to your Oregon congressional representatives (see below)
  7. Ideally share your comments with me at– Housing Oregon


What is the CRA?

The CRA law was created in 1977 to deal with the effects of the failure of the market to provide capital to African American communities in particular. Racial discrimination was the central issue CRA attempted to address along with similar legislation such as the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA). The FHA and ECOA were designed to address individual acts of discrimination but failed to address the systemic racial discrimination.

Impact of the CRA in Oregon

Below is data showing how much CRA qualified lending was reported from 2009 through 2018 in several Oregon cities. (Data, National Community Reinvestment Coalition)

Mortgages to LMI Borrowers or Neighborhoods $1,860,015,450
Business Loans to LMI Neighborhoods $542,229,230
Loans to Small Businesses $580,528,000
Mortgages to LMI Borrowers or Neighborhoods $2,570,212,890
Business Loans to LMI Neighborhoods $1,217,082,480
Loans to Small Businesses $785,166,000
Mortgages to LMI Borrowers or Neighborhoods $25,301,094,420
Business Loans to LMI Neighborhoods $5,631,623,260
Loans to Small Businesses $4,524,925,000
Mortgages to LMI Borrowers or Neighborhoods $2,589,030,180
Business Loans to LMI Neighborhoods $665,291,850
Loans to Small Businesses $579,494,000

Principles for a modern CRA

Even critics of the proposed changes agree there is need for modernizing the CRA, just not what is currently being proposed. NCRC provides a great outline of what needs to be in a modern CRA and how this proposal doesn’t get us there. (Scroll about half-way down the page for more.)

  1. Don’t strip ‘community’ out of a law that’s supposed to strengthen communities.
  2. Protect communities of color with explicit language against racial discrimination.
  3. Keep all lenders accountable.
  4. Set a clearly defined CRA grading system.
  5. Don’t be afraid to let banks fail.

What is being proposed?

The proposed changes focus on three topics according to National Alliance of Community Economic Development Associations (NACEDA):

  1. What counts – Redefining what is CRA eligible, moving away from LMI
  2. Where it counts – Changing assessment areas
  3. How it counts – New scoring system.


What Counts

There would be a shift from local communities defining what their development needs are to the OCC deciding. The OCC would provide a list expanding the range of eligible development projects, essentially redefining the definition of community development to include many things not directly targeted to low-and-moderate income neighborhoods such as infrastructure, luxury housing and stadiums in Opportunity Zones, financial literacy targeted to anyone regardless of income, and agricultural activity.

A “single-metric” approach would be used to rate banks on their total volume of reinvestment activities as compared to deposits. Quantity over quality would lead to simpler and larger deals over smaller and more complex deals that could be more impactful. For CDCs this could lead to a shift focusing on financing for mission-driven nonprofit developers to build and improve deep and permanently affordable housing to more large-scale deals with for-profit developers. In addition, this could lead to fewer grants to support neighborhood and community-based organizations.

Current Proposed
Resources targeted at a community identified need A ‘non-exhaustive’ list to include public infrastructure, roads, and stadiums
Primary purpose to serve LMI communities Primary or partial purpose to serve LMI communities
Robust service tests (volunteerism and products) Virtually eliminated
Separate lending, investment, and service considerations “One ratio” + pass/fail version of lending test

Source: National Alliance Community Economic Development Associations

Through a racial justice lens the changes get away from what low-income communities and communities of color need like more bank branches, affordable banking products, quality jobs, and financing for deep and permanently affordable housing. Expanding what counts for CRA credit will benefit larger businesses and higher-income families at the expense of communities served by mission-driven CDCs.

According to the National Community Reinvestment Coalition (NCRC), affordable housing would be redefined as “That is likely to partially or primarily benefit low- or moderate-income individuals or families as demonstrated by median rents that do not and are not projected at the time of the transaction to exceed 30 percent of 80 percent of the area median income.”

The Association for Neighborhood and Housing Development’s (ANHD) analysis finds this includes allowing financing for multifamily buildings with affordable rents, but no evidence that lower-income people live in those apartments, and regardless of incidents of harassment or displacement. Tests for providing services, such as free or low-cost checking or volunteering, would virtually be eliminated.


Where and how it counts

Currenty, banks have an obligation to assess and meet community credit needs reinvesting within geographic areas around their branch locations. While CRA reform must address the issue of “assessment areas,” as banks shift more to an online presence and fewer or no neighborhood branches, groups like NCRC believe the proposed changes are unworkable and would reduce transparency.

The proposal expands where banks can get credit for investments and creates so many loopholes that allows investing outside these assessment areas, according to AHND, that it disincentivizes banks from focusing on local community needs and partnerships. Banks that gather 50% or more of their deposits from outside a traditional branch network would be required to create additional assessment areas in communities that account for 5% of more of their deposits, based on physical addresses of depositors.

A bank could fail to meet its reinvestment targets in 50% of its assessment areas and still pass its exam. “As long as a financial institution is meeting its eligible activities in at least half of their assessment areas, its ok to ignore the other half,” says NACEDA’s Frank Woodruff. “That to me is the definition of redlining.”

The concern is the change will likely lead to a concentration of investments in larger and wealthier urban areas like New York and Los Angeles to the detriment of smaller financial markets like Oregon, and negatively impacting rural areas.

As for transparency, the proposal hinges on collecting the physical addresses of depositors, data that is not currently available. Groups like NCRC, feel the changes would make it impossible for outside stakeholders to know what new assessment areas are and industry would likely cite privacy concerns at making such data available.


For more info or questions: contact Brian Hoop at or 503-475-6056.