Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services introduced H.R. 8833, the “Making Communities Stronger Through the Community Reinvestment Act.” This transformative piece of legislation is a part of Chairwoman Waters’ continuing efforts to root out discrimination in our modern-day banking system and close the racial wealth and homeownership gaps by making key reforms to the Community Reinvestment Act (CRA). Congress passed the CRA in 1977, but after nearly 45 years, the law has not kept up with changes in the banking system and is in need of reform to ensure that banks serve communities that have been historically redlined and left behind by our financial system.

“More than 40 years ago, Congress passed the CRA in response to racist policies in banking and lending that excluded Black homebuyers and renters from affordable housing options and robbed Black families of the opportunity to build wealth through the American dream of homeownership. Unfortunately, even after so many years, there’s been very little progress,” said Chairwoman Maxine Waters. “That’s why I introduced the ‘Making Communities Stronger Through the Community Reinvestment Act.’ This bill will hold banks accountable to the local communities where they have branches or do most of their lending, and make crucial updates to ensure they are providing equal access to affordable credit, investing in the communities they serve and doing their part to close the widening racial-wealth gap. We can’t wait any longer.”

Specifically, this bill will make updates to the current CRA by:

• Ensuring bank services, loans and investments are meaningful and responsive to the needs of low- and moderate-income communities and communities of color;
  
• Providing local communities with more of a say on banks’ CRA exams and activities;
  
• Requiring CRA examiners to consider all unlawful activity on banks’ CRA exams;
  
• Requiring CRA exams to evaluate bank lending done in partnership with non-banks and fintechs;
  
• Encouraging lenders to make more small-dollar mortgages, specifically those under $100,000; and
  
• Building a strong record of data to better identify ongoing discrimination or racial disparities and provide a pathway to consider this information on bank exams in the future.
  

The “Making Communities Stronger Through the Community Reinvestment Act” is endorsed by the Association for Neighborhood and Housing Development, California Reinvestment Coalition, National Alliance of Community and Economic Development Associations (NACEDA), National Community Reinvestment Coalition, National Coalition for Asian Pacific American Community Development (CAPACD), ProsperityNow and UnidosUS.

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Background:

On April 9, 2019, the Consumer Protection and Financial Institutions Subcommittee convened a hearing entitled, “The Community Reinvestment Act: Assessing the Law’s Impact on Discrimination and Redlining.”

On December 12, 2019, Chairwoman Waters led a delegation of the Committee in attending a public meeting of the FDIC’s Board of Directors where CRA was on the agenda.

The Members’ trip to the FDIC followed a letter sent to banking regulators led by Chairwoman Waters and then Consumer Protection and Financial Institutions Subcommittee Chairman Gregory Meeks (D-NY) and signed by all 34 Committee Democrats, along with all 12 Senate Banking Committee Democrats led by Ranking Member Sherrod Brown (D-OH). The letter, addressed to FDIC Chairman McWilliams, Federal Reserve Chairman Jerome Powell, and OCC Comptroller Joseph Otting, calls on the regulators to, at a minimum, include a public comment period of at least 120 days for any proposal reforming CRA to ensure it gets a full vetting and that all interested parties have an opportunity to analyze and comment on the proposal.

On January 14, 2020, the Subcommittee on Consumer Protection and Financial Institutions, then chaired by Rep. Gregory Meeks (D-NY), convened a hearing with stakeholders testifying entitled, “The Community Reinvestment Act: Reviewing Who Wins and Who Loses with Comptroller Otting’s Proposal.”

On January 15, 2020, Chairwoman Waters opened an investigation into potential astroturfing efforts to influence the OCC and FDIC’s CRA rulemaking, demanding the agencies explain efforts to ensure legitimacy of the rulemaking process.

On January 29, 2020, Chairwoman Waters convened a hearing entitled, “The Community Reinvestment Act: Is the OCC Undermining the Law’s Purpose and Intent?” with Comptroller Otting testifying as the sole witness.

On February 6, 2020, the Oversight and Investigations Subcommittee, chaired by Rep. Al Green (D-TX), convened a hearing with stakeholders entitled, “Fake It Till They Make It: How Bad Actors Use Astroturfing to Manipulate Regulators, Disenfranchise Consumers and Subvert the Rulemaking Process.” As part of the hearing, witnesses discussed allegations that Comptroller Otting, when he was the CEO of OneWest Bank, may have been involved in fabricating comments in support of OneWest’s merger with CIT.

On February 24, 2020, in response to efforts by Chairwoman Waters and Committee Democrats to ensure the public had enough time to provide comment on the OCC and FDIC’s Notice of Proposed Rulemaking to overhaul CRA regulations, the agencies announced a 30- day extension of the comment period.

On March 6, 2020, the Subcommittee on Consumer Protection and Financial Institutions, chaired by Rep. Gregory Meeks (D-NY), convened a field hearing with stakeholders in Queens, New York, entitled, “Modern-Day Redlining: the Burden on Underbanked and Excluded Communities in New York.”

On April 7, 2020, Chairwoman Waters led a letter signed by all other Committee Democratic Members to Comptroller Otting and Jelena McWilliams, Chairman of the Federal Deposit Insurance Corporation (FDIC), urging them to prioritize a strong response to the COVID-19 pandemic and suspend efforts to revise the Community Reinvestment Act and any unrelated rulemakings.

On June 29, 2020, the House of Representatives passed H.J. Res 90, a Congressional Review Act resolution of disapproval to nullify the OCC’s harmful Community Reinvestment Act rule introduced by Chairwoman Waters and Rep. Meeks.

On July 22, 2021, Chairwoman Waters released a statement applauding the OCC’s decision to rescind the 2020 Community Reinvestment Act rule and work with the FDIC and the Federal Reserve to draft a new rule.

On July 13, 2022, the Subcommittee on Consumer Protection and Financial Institutions convened a hearing entitled, “Better Together: Examining the Unified Proposed Rule to Modernize the Community Reinvestment Act.”

On August 8, 2022, Chairwoman Waters led a letter with 76 Democratic Members of the U.S. House of Representatives to the leaders of the Board of Governors of the Federal Reserve System (Fed), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) urging the regulators to consider carefully the comments they receive from civil rights and community groups as well as other stakeholders to their joint proposed rulemaking to modernize the CRA.

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