NYC Comptroller Brad Lander Urges Federal Regulators to Strengthen Equitable Banking and Lending Access in Low-Income Neighborhoods and Communities of Color

New York, NY — New York City Comptroller Brad Lander submitted a public comment on the Notice of Proposed Rulemaking (NPR) regarding updates to Community Reinvestment Act (CRA) rules, federal legislation intended to ensure banks meet the needs of the communities in which they conduct business, including in low- and moderate-income communities. In his comments, Comptroller Lander called upon the federal regulators to specifically address racial discrimination. In addition to his own comment, Comptroller Lander organized and joined more than 40 local lawmakers from across the country who submitted a joint comment.  

“The Community Reinvestment Act is a crucial piece of civil rights legislation that makes strides towards eliminating discriminatory banking policies and practices that deter the economic thriving of people of color. However, banking has changed over the last three decades and the current regulations are not equipped to hold banks accountable for practices which have further widened the racial wealth gap. The Notice of Proposed Rulemaking provides a historic opportunity to eliminate the persistent and prevalent racial disparities in banking nationwide, and secure a more equitable recovery out of the pandemic,” said New York City Comptroller Brad Lander. 

First passed in 1977, the Community Reinvestment Act is a seminal piece of civil rights legislation intended to reverse the racist legacy of redlining and create opportunities for people of color to access banking, credit, housing, employment, and education. The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of Currency issued a Notice of Proposed Rulemaking to update the CRA in May 2022. 

The NPR is the first opportunity to substantively revise the law since 1995 and presents a major opportunity to advance equity and create new economic opportunities for low-income communities of color. As Comptroller of the City of New York and a member of the NYC Banking Commission, Lander submitted detailed suggestions to maximize this once in a generation moment, including: 

• Explicitly Address Race Disparities: While the CRA intends to be an anti-redlining law, it currently applies a race-blind analysis. In order to modernize the CRA standards, the NPR must include race as a criterion in analysis of banks. 
• Closing Loopholes: As they stand, the CRA provides multiple loopholes that allow banks to avoid serving low-income and BIPOC communities. The revisions to the law must seek to actively close loopholes. 
• Expand Community Input: When evaluating the performance of banks under the CRA, regulators should be required to seek comprehensive community input, including letters, hearings, and listening sessions.
• Supporting Communities Regulators should test whether lenders give equal opportunities to owner-occupied homes and the smallest of small businesses to help build wealth in BIPOC communities without fueling displacement. 
• Responsible Multi Family Lending: Regulators should use all the tools in their toolkit and downgrade banks who do business with predatory landlords that harm and displace LMI and BIPOC communities, especially in the midst of the housing crisis. 
• Ensuring Access to Banking: Regulators should examine where banks are getting deposits compared to where they are lending money. Also, regulators should monitor banks that open and close branches to ensure access in communities that are often neglected. 

The public comment is available here.

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