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

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 to the National Community Reinvestment Coalition’s calculations, Banks History of CRA 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.

America still exhibits glaring economic segregation, which often results from unequal access to banking and credit. But, the CRA did not erase This remains true in Toledo. discrimination… In recent years, major banks implemented lending in a pattern eerily consistent with historic patterns of redlining.

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

Most of the branches lost in the Toledo area were located in low to moderate The loss of income areas branch locations over time http://bit.do/BankBranches

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

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 The OCC’s capacity. proposal 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

Please pass • The proposed resolution can be used to comment to the OCC to help prevent the proposed implementation of the harmful rule. resolution • The deadline for comments is November 19.