Better Together: Examining the Unified Proposed Rule to Modernize the Community... (EventID=114998)

Video Description

Connect with the House Financial Services Committee Get the latest news: https://financialservices.house.gov/ Follow us on Facebook: https://www.facebook.com/HouseFinancialCmte Follow us on Twitter: https://twitter.com/FSCDems ___________________________________ On Wednesday, July 13, 2022 , at 10:00 p.m. (ET) Consumer Protection and Financial Institutions Subcommittee Chairman Perlmutter and Ranking Member Luetkemeyer will host a hybrid hearing entitled, “Better Together: Examining the Unified Proposed Rule to Modernize the Community Reinvestment Act." - - - - - - - - Witnesses for this one-panel hearing will be: • Seema Agnani, Executive Director, National Coalition for Asian Pacific American Community Development • Catherine Crosby, Chairperson, National Community Reinvestment Coalition • Yoselin Genao-Estrella, Executive Director, Neighborhood Housing Services of Queens CDC, Inc. • Quentin Leighty, Chief Financial Officer and President, First National Bank of Las Animas (on behalf of Independent Community Bankers of America) • Darryl E. Getter, Specialist in Financial Economics, Congressional Research Service Overview Background In 1977, Congress passed the Community Reinvestment Act (CRA) in response to redlining and other discriminatory lending practices. Redlining refers to the discriminatory practice of refusing to extend credit or denying credit to borrowers in geographic areas based on demographics such as race or ethnicity. The purpose of the CRA was to require banks “to meet the credit needs of [their] communities, including low- and moderate-income (LMI) neighborhoods, consistent with safe and sound operations.” Despite the intent to curb redlining, race is not explicitly considered on bank CRA exams, and evidence continues to mount that modern-day redlining persists, as people of color and LMI communities often still face obstacles in accessing affordable credit and other financial services. The Financial Services Committee has held hearings in recent years discussing the CRA’s impact on LMI communities and communities of color, featuring testimony highlighting that despite the Congressional intent of the CRA, it has not been effective in curbing redlining in the modern-day banking system. In his 2019 testimony, journalist Aaron Glantz shared a finding from his investigation into modern-day redlining: In 61 metro areas across the country, people of color were more likely to be denied a conventional mortgage than their white counterparts, even when they made the same amount of money, tried to borrow the same amount of money, and wanted to buy in the same neighborhood…[d]espite these disparities, 99 percent of national banks received a satisfactory or outstanding grade on their inspections under the Community Reinvestment Act. Mehrsa Baradaran, Professor of Law at the University of Georgia School of Law, testified that, “ while the nature of banking has changed dramatically since the passage of the CRA, the inequalities and injustices the CRA was designed to remedy have only gotten worse. The law must be updated and strengthened.” On May 5, 2022, the federal banking regulators overseeing CRA announced a joint proposal “to strengthen and modernize regulations implementing the Community Reinvestment Act to better achieve the purposes of the law.” This hearing will examine recent CRA developments, including how the proposed rule will evaluate bank lending and financial services in the context of increasingly digital banking relationships; whether it will lead to expanded access to financial services and credit to LMI communities and communities of color; and its potential in finally putting an end to modern-day redlining. ... Hearing page: https://financialservices.house.gov/events/eventsingle.aspx?EventID=409518