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Making CRA modernization matter

NHC and the CRA Working Group are hard at work on our comment letter on the Federal Reserve Board’s Advance Notice of Proposed Rulemaking (ANPR), which is due on Feb. 16. Under the leadership of Chairman Jay Powell and Governor Lael Brainard, the Fed has offered a genuine request for feedback on modernizing one of the most impactful rules in housing and community development. The depth and detail of the ANPR’s 99 questions make clear they want to hear about our experiences and get our feedback as they engage in the formal rulemaking process.

I’m especially encouraged by the renewed prospect of a unified rulemaking across the Fed, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency, particularly with Michael Barr as a leading candidate for Comptroller. During the Clinton administration, Barr helped strengthen CRA and launch the New Markets Tax Credit, and in the Obama administration he was a driving force behind the creation of the Consumer Financial Protection Bureau. Barr’s academic work, while teaching at the University of Michigan, has focused on advancing racial justice, including the creation of the Entrepreneurs of Color Fund and the Detroit Neighborhood Entrepreneurs Project to support minority-owned small businesses in Detroit. If nominated and confirmed, he can reinvigorate the prospects of uniform modernization that spans all three banking regulators.

NHC’s advocacy for CRA modernization has focused on four basic principles. To be successful, CRA modernization must (1) increase investment in communities that are currently underserved; (2) benefit more low- and moderate-income households, particularly minority households, who live in those communities; (3) ensure CRA lending and investment does not lead to displacement of the very people it is intended to serve; and (4) make both bank performance and government enforcement more transparent and predictable. Our comment letter will address the issues of mortgage securitization, community development lending and investing, and the need to modernize the way we think about assessment areas in a market dominated by interstate and mobile banking. We will also offer guidance to the Fed on how to address racial equity more directly, consistent with the letter and intent of the CRA statute and the Fair Housing Act.

If you’re an NHC member and you feel strongly about how the Fed should approach any of these issues in its rulemaking, please share your views with us at so that we can be aligned in advocating for a unified solution. As someone who has read thousands of comment letters during the course of my career, I can attest to the effectiveness of multiple stakeholders expressing unique experiences around a common theme. The most valuable thing you can offer a regulator is your detailed experience and insights. You are the expert. You know how the proposed changes will impact your organization, your lending, your programs, and your community. Share that real-world experience and powerful point of view, and your feedback will be welcome and impactful.

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