The Community Reinvestment Act in Discussion for Resolution 473-18 - - PowerPoint PPT Presentation

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Jun 09, 2023 106 likes •234 views

The Community Reinvestment Act in Discussion for Resolution 473-18 Toledo The Community Reinvestment Act, passed in 1977, sought to end redlining, by requiring banks to lend money in the communities where they do business. According

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The Community Reinvestment Act in Toledo

Discussion for Resolution 473-18

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History of CRA

The Community Reinvestment Act, passed in 1977, sought to end “redlining,” by requiring banks to lend money in the communities where they do business. According to the National Community Reinvestment Coalition’s calculations, Banks have made nearly $2 trillion in small-business and community development loans since 1996. The CRA has benefited Toledo, too, though it is difficult to specifically calculate how much investment has occurred as a direct result of the CRA.

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But, the CRA did not erase discrimination…

America still exhibits glaring economic segregation, which often results from unequal access to banking and credit. This remains true in Toledo. In recent years, major banks implemented lending in a pattern eerily consistent with historic patterns of redlining.

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Branch locations

In addition to lending patterns, the CRA also reviews the locations of bank branches, and scrutinizes branch closings in low to moderate income areas. Though the CRA helped stymie the loss of branches, Toledo experienced a significant loss of branch locations over the last two decades.

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The loss of branch locations over time

Most of the branches lost in the Toledo area were located in low to moderate income areas http://bit.do/BankBranches

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The OCC’s notice

The Office of the Comptroller of the Currency issues regulations implementing the CRA and monitors for CRA compliance The OCC has suggested a change to its CRA regulations. The proposed change will hurt Toledo

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The OCC’s proposal

One of the proposed changes is a new ratio that banks and regulators could use to measure a bank’s performance under the law. The simple ratio would compare the value of all of a bank’s community lending activities — like loans, services and philanthropy — to some measure of the bank’s overall capacity. The ratio would allow banks to make even fewer loans in low-income areas. The proposal would be particularly harmful to small to mid- size cities like Toledo