NCRC Retrospective: 25 Years of Opening Doors to Economic Opportunity

25 Years of opening doors to economic opportunity

“For 25 years NCRC has boldly and fiercely advocated on behalf of working families across the nation. NCRC is at the forefront of the work to create fair economic opportunities for low- and moderate-income communities and communities of color. John Taylor and NCRC have served as the moral compass on matters relating to economic justice, and our nation is better because of their work.”

Henry Cisneros, Former Secretary, U.S. Department of Housing and Urban Development

“NCRC stands firmly behind a really simple idea that when Americans are given the tools for success, Americans succeed.”

Sen. Hillary Clinton, 2007 NCRC Annual Conference

NCRC is a great American Institution. It stands as a testament to both our country at its best — caring for low- and moderate-income Americans — giving folks a hand up — and it also stands for concrete accomplishment, not just words.

As a result of strong leadership and tireless commitment, the organization can point to millions of Americans whose lives are materially better off because of its work. At this important anniversary, we are proud to support NCRC and its people.

Eugene Ludwig, Former Comptroller of the Currency

“NCRC’s ability to shape and influence national policy is at its highest point, and has been over the last several years.”

Robert Dickerson, Jr., Executive Director, Birmingham Business Resource Center; Chair, NCRC Board of Directors

contents 06 16 22 30 36

The Origins of the Coalition

NCRC is Born, and CRA Gains a Unified Group of Advocates and Defenders

Data Drives the Movement for Economic Justice

NCRC Harnesses the Power of Data in a New Way to Benefit Our Communities

Sounding the Alarm on Predatory and Subprime Lending and the Need for Stronger Financial Regulation NCRC’s Testing, Housing Counseling, and Foreclosure Prevention Pushing for Financial Reform to Protect Consumers NCRC’s Work on the Dodd-Frank Act

40 44 48 56 66

Community Reinvestment Goes Worldwide Global Fair Banking Initiative

Don’t Bank on Wal-Mart

NCRC’s Recent Major Campaigns

NCRC’s Annual Conferences

Coming Together to Create a Just Economy

NCRC Today

The Origins of the Coalition

NCRC is Born, and CRA Gains a Unified Group of Advocates and Defenders

he National Community Reinvestment Coalition was

first hand that financial institutions were lobbying Congress to try to

born when Representative Joseph Kennedy II acted

roll back CRA and other financial regulation and were on the verge of

to head off a burgeoning legislative threat against

having some success at seriously eroding these laws. At the same time,

the Community Reinvestment Act (CRA). In the year

Congress wasn’t hearing from community groups on fair lending or

1990, Representative Kennedy, sensing a growing bipartisan push

community reinvestment issues in a coordinated, meaningful way,

to weaken CRA, assembled 19 organizations that he identified as active

leaving Congress primarily with a one-sided, industry perspective on

in the community reinvestment sphere. These organizations included

many important matters.

the National Council of La Raza, the NAACP, Enterprise Foundation,

LISC, the National Congress for Community Economic Development,

“It shows how much things have changed that a member of Congress

the Center for Community Change, the McCauley Institute,

had to go to these groups and bring them together in this way,” says

ACORN, and others.

John Taylor, NCRC’s President and CEO. “But Joe Kennedy saw a

need, and thankfully, he took action. Otherwise CRA would not be

Representative Kennedy gathered these organizations together to

here today.”

share the rumblings he had heard in the back rooms of Congress that

T

legislation to gut CRA could gain traction. He impressed upon these groups that there was an urgent need to organize, since he could attest

6

“He was the original catalyst,” says Bob Zdenek, a former member of NCRC’s board of directors. “Joe Kennedy played an important role on the affordable housing front and was a real champion. He provided the

“It shows how much things have changed that a member of Congress had to go to these groups and bring them together in this way. But Joe Kennedy saw a need, and thankfully, he took action.

Otherwise CRA would not be here today.”

John Taylor, NCRC President and CEO

seed and the initial energy [to start the coalition].”

7

THE ORIGINS OF THE COALITION

Rep. J o

seph

8

In reaction to Representative Kennedy’s call to action, these 19 groups

When it came time to hire the first employee to run the organization,

worked together to found the National Community Reinvestment

after an extensive search they chose John Taylor, a community leader

Coalition. The organization was created with the specific purpose of

from Massachusetts who had become well known for challenging

defending and preserving CRA. On November 7, 1990, the organization

banks in Boston, and who had volunteered on the NCRC board.

was incorporated as a nonprofit organization.

Taylor, who had previously run a multiservice center in Somerville,

A key decision early on helped shape the organization and set it on

Massachusetts, was well attuned to the needs and challenges facing

a path towards success and national impact: a founding rule of the

small local organizations. Taylor’s experience as a grassroots leader

organization required significant representation from the local level on

led him to take an approach that was centered around giving local

the board of directors. This decision became one of NCRC’s defining

organizations a voice and power in Washington and representing their

principles. “You have people who really believe in what they’re doing,

interests in a way that accurately reflected their needs and priorities.

that believe in their community, and they’re truly there for their

That background helped NCRC to stand apart as an organization that

community,” said NCRC board member Gail Burks. “It’s not about

tapped into local communities in a remarkable way.

doing what’s convenient to Washington or to Congress or to anybody

else. Either you represent your community or you don’t.”

NCRC’s effectiveness was bolstered by a very strong volunteer

board of directors comprised of community advocates with

Kenn

edy II

THE ORIGINS OF THE COALITION

“You have people who really believe in what they’re doing, that believe in their community, and they’re truly there for their community.”

Gail Burks, President and CEO, Nevada Fair Housing Center; Member, NCRC Board of Directors

Attorney

net Reno

General Ja

significant experience interacting with Capitol Hill staff and members

“There was a cadre of nonprofit

– advocates such as F. Barton Harvey III, Deepak Bhargava, Buzz

organizations involved in neighborhood

Roberts, and Allen Fishbein. With these Hill advocates as well as local

revitalization and then there were economic

community advocates flooding Capitol Hill with messages of all

justice organizations. What we wanted to do was build

forms, NCRC became a powerful presence on the Hill on behalf of

this collaboration between organizations that didn’t traditionally

communities across the nation.

work together. The Community Development Corporations didn’t

traditionally work with the advocacy organizations because they saw

A seminal moment in NCRC’s formative stage was an early summit

them as too radical, and the advocacy groups didn’t typically work with

in Chicago to discuss the organization’s development. A group of

the CDCs because they saw them as too conservative. But they had a

national, regional, and local organizations were all invited to convene.

common interest in community reinvestment. NCRC’s goal was to build

The goal was to draw in organizations that had not traditionally been

the coalition with these organizations and others: faith groups, civil

seen as economic justice-oriented and bring them into the coalition.

rights groups, local city governments and more.”

John Taylor describes the strategy that went into developing the

This diversity in the coalition was reflected in the board itself, as

coalition as a purposeful convergence of many different types

well as their active role in NCRC’s mission, something that continues

of groups:

today. “This is a working board,” says NCRC board member

9

THE ORIGINS OF THE COALITION

“NCRC was born from an action by 19 national, regional, and local groups to refocus Congress on the importance of CRA and its effective implementation. Now NCRC is 25 years old, and has had remarkable accomplishments…”

F. Barton Harvey III, Founding Chair, NCRC Board of Directors

Rev. Je s

se Jack

10

son

THE ORIGINS OF THE COALITION

Stella Adams. “The expertise on this board is amazing. These

In 1993, NCRC was invited to participate in President Bill Clinton’s

are top players in the community development, fair housing, fair

announcement of his proposed Community Development Financial

lending, predatory lending games.”

Institution legislation. Henderson, who was Chair of NCRC’s board

of directors at the time, gave remarks alongside the President at

Having such an eclectic and large group of people and organizations

the event:

coming together around economic justice ratcheted up the

conversation around CRA and community reinvestment. With a unified

“Despite their challenges the poor and underserved of this nation have

coalition that saw the common benefit in working together, Congress

great potential. They need training, they need access to capital, they

and regulators heard from community CRA advocates in a way that

need leadership, and they need a chance to participate in the American

they never had before. “They hadn’t seen that level of organizing,”

Dream, a dream that is not dead, but must be revived. The membership

recalls NCRC board member Irvin Henderson. “It was phone calls

of the National Community Reinvestment Coalition understands these

and shoe leather. All of these efforts showed that not only was this

needs. The Americans that have these needs are not strangers to

group of people organized but that we were agitated enough to be

us. They are our friends, our cousins, our brothers, our mothers, our

entrepreneurial and to be strident, and what the powers that be said

colleagues and ourselves. Their struggle is our struggle.”

is, ‘is it worth it to try to fight this kind of battle?’”

For NCRC, participation in this event at the White House signaled

In effect, by showing legislators that there was concerted community

in a major way that the coalition had arrived as a prominent voice

groundswell surrounding the importance of CRA, this nascent coalition

for communities that had a newly earned place on the national

rose up and saved it from being eliminated.

stage. Within just a few years of existence NCRC had built a coalition of

over 250 organizations and gained the clout to be on the stage with the President of the United States.

11

THE ORIGINS OF THE COALITION

Looking back on NCRC’s accomplishments since its founding, F. Barton

President and CEO, John Taylor, has been to extend the membership

Harvey III, the first Chair of NCRC’s board of directors, says, “Perhaps

across the country to more than 600 community-based groups who

the most important legislation that Congress passed to provide

understand the power and equity of CRA and fiercely defend it.”

equitable capital access to low-income people and minority or marginalized communities is the Community Reinvestment Act

of 1977. By 1990, CRA was under serious attack in Congress, with proposed legislation to gut or seriously restrict its effectiveness.

NCRC was born from an action by 19 national, regional, and and its effective implementation. Now NCRC is 25 years old, and has had remarkable accomplishments, and CRA, with

really good,” says former NCRC board member Bob Zdenek. “You have the Clinton administration and you have some favorable regulators.

[Former Comptroller of the Currency] Gene Ludwig really made it a

valuable modifications, continues to help low-income

high priority of the OCC to lead the charge around modernizing CRA.”

people and communities access mortgages, business loans, and credit. The genius of its first and longstanding linton

nt Bill C

12

The early years of Clinton’s presidency also offered NCRC an opportunity to proactively improve CRA. “In 1993, the timing was

local groups to refocus Congress on the importance of CRA

Preside

Improving the Implementation of CRA

THE ORIGINS OF THE COALITION

“Despite their challenges the poor and underserved of this nation have great potential. They need training, they need access to capital, they need leadership, and they need a chance to participate in the American Dream, a dream that is not dead, but must be revived...�

Irvin Henderson, Former Chair and Current Member, NCRC Board of Directors, Address on the White House lawn, July 15, 1993

13

THE ORIGINS OF THE COALITION

Comptroller

of the Currenc

dwig

y Eugene Lu

“In Eugene Ludwig we had someone as head of the national banking

NCRC put CRA on the radar of those who most benefit from it and built

system who actually cared and spoke about CRA,” says John Taylor.

a strong, unified, nationwide voice that led to major, much-needed

reforms to the law.

In response to Clinton’s call for reform of CRA, the Federal Reserve invited comments on banking regulation under CRA. NCRC took this

Through these efforts, for the first time in the history of the Federal

occasion to lead the effort to ensure that CRA exams were made

Reserve, the financial industry was out-commented by community

rigorous and responsive to community needs. One major priority for

groups. The end result, in part, was a new CRA exam process that

NCRC was moving CRA examinations from a process orientation to

graded banks based on the results of three tests measuring levels of

one of performance. “In the past, a bank simply had to have a CRA

lending, servicing, and investments in low- and moderate-income

file somewhere—literally a folder entitled ‘CRA’—and they needed to

communities. When announcing the rule, the Federal Reserve

have signs in the bank lobby noting that they adhered to fair lending

specifically thanked NCRC for its work to make sure that community

laws,” says Taylor. “Nothing more.” The goal was to create an exam that

needs were adequately reflected. This campaign further expanded

measured how banks actually fulfilled their obligations.

NCRC’s national membership in its early years and continued to solidify

its reputation as a fierce advocate for average Americans.

NCRC “pulled all the stops,” according to Taylor, and placed the

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highest urgency on bringing together organizations to comment on the

Overall during this period of time the political atmosphere

proposal. NCRC strove to raise awareness of the benefits CRA provides

was supportive of CRA, and through the work of NCRC

to communities. Not only did NCRC educate the public about what the

and other advocates, along with allies in the government, financial

law did, it talked about what it ought to do. By rallying this coalition,

services and investments were returning to communities. “Here

THE ORIGINS OF THE COALITION

“Here was this golden period where the regulators were encouraging CRA agreements and agreements were getting written with big banks and little banks alike. We were able to get commitments that translated into loans, and especially community development-type loans. That was a high period for CRA support.”

Stella Adams, Housing Chair, North Carolina NAACP; Member, NCRC Board of Directors

was this golden period where the regulators were encouraging CRA

The Council consists of representatives from the nation‘s

agreements and agreements were getting written with big banks and

top banks and lenders and members of community

little banks alike,” remembers NCRC board member Stella Adams. “We

groups who work to explore ideas and projects

were able to get commitments that translated into loans, and

where nonprofits and the financial sector can work

especially community development-type loans. That was a high period

together. “I think the Council is really significant

for CRA support.”

for our relationship with national banks, to meet and discuss [CRA],” says former NCRC

Bringing Banks and Communities Together Another innovation to ensure that banks fulfill their CRA obligations is the Banker Community Collaborative Council. NCRC formed the Council to dialogue with banks and educate them on appropriate channels for providing fair access to financial services. “It provided an opportunity for NCRC to be talking about reinvestment opportunities and how this was good potential business for the banks,” says former Chair of NCRC‘s board of directors Ted Wysocki. “I think there was a real hunger on the banks’ part to work together.”

board member Bob Zdenek. “It’s a really interesting dynamic.”

The Council enables community advocates to engage with lenders around critically important reinvestment issues. It also enables community leaders to hear about the challenges and opportunities for the future of community investment directly from the financial services community.

15

Data Drives the Movement for Economic Justice NCRC Harnesses the Power of Data in a New Way to Benefit Our Communities

S

aving CRA was NCRC’s first priority and test as an

activities, consumer advocates were mostly limited to speaking to

organization. The second was to shed daylight on bank

local community members’ experiences on an anecdotal basis. At the

lending activity by influencing the availability and

time, the prudential regulators had important data from banks that

distribution of lending data.

they were required by law to collect as part of the Home Mortgage

Disclosure Act (HMDA), but they did not readily allow public access to

“NCRC understands and has always understood that data drives our

this data. Therefore, a major priority for NCRC was to convince

movement,” says John Taylor. “The more we can paint an accurate

the regulators that this data must in fact be more easily

and precise picture of what is happening in neighborhoods, along

available to the public. The aim was to create sunshine

color, gender, census tract and income lines, the more we’re going to

on bank activity in communities, to show patterns

be able to motivate and influence banks and regulators and members

of lending, disparities, and areas where access

of Congress to act fairly and responsibly.”

was needed.

16

When the coalition was created, community groups were at a

To address this need, NCRC’s leadership and

significant disadvantage in meetings with lenders. While lenders and

board members convened meetings with

regulators came to negotiations armed with specific data on their

the heads of the prudential regulatory

“For 25 years NCRC has boldly and fiercely advocated on behalf of working families across the nation. NCRC is at the forefront of the work to create fair economic opportunities for low- and moderateincome communities and communities of color. John Taylor and NCRC have served as the moral compass on matters relating to economic justice, and our nation is better because of their work.�

Henry Cisneros, Former Secretary, U.S. Department of Housing and Urban Development

Federal Reserve Chairman Alan

Greenspan

17

DATA DRIVES THE MOVEMENT FOR ECONOMIC JUSTICE

“Once we were able to harness the power of the data, the quality of the conversation, and our engagement in this fight, advanced exponentially.”

John Taylor, NCRC President and CEO

“All of a sudden we knew more about the bank’s data than the people we were meeting with,” says NCRC board member Irvin Henderson. “We had more analysis, we could pull out facts and they would say, that can’t be right, can it? They didn’t

18

agencies, including Federal Reserve Chair Alan Greenspan. Greenspan

know! It gave us a tremendous amount of power. We began to get

ultimately agreed that the data should be made public. For the first

the reputation of having really accurate data and being able to

time, data on every loan in the country based on income, race, and

articulate it.”

gender became available on CD-ROM from banking regulators.

In 1995, NCRC produced its first major research report, America’s Best

The availability of this data allowed NCRC’s staff to conduct their

and Worst Lenders. The report presented a series of data indicators

own analyses to illustrate the lending activities of different banks.

on the performance of lenders in major metropolitan areas across

In meetings with banks they cited specific data, showed charts, and

the nation. It included percentages of loans to low- and moderate-

provided irrefutable evidence on lending activity.

income individuals, minorities, African Americans, Hispanics,

women, and market share analysis and disparity ratios. This

“Once we were able to harness the power of the data, the quality

information provided a robust index of which institutions had been

of the conversation, and our engagement in this fight, advanced

the most and least successful at reaching and serving underserved

exponentially,” says John Taylor.

populations and communities.

DATA DRIVES THE MOVEMENT FOR ECONOMIC JUSTICE

“I think that one of the benefits of being a member of NCRC is the HMDA data and our ability to call up any of the folks in the Research Department and get lending and branching analysis for an institution, and to have the confidence that it’s accurate and that we can put that forward to the regulators, and to the banks themselves, to show where they need to do some work.”

Bethany Sanchez, Director, Fair Lending, Metropolitan Milwaukee Fair Housing Council; Former Chair and Current Member, NCRC Board of Directors

19

DATA DRIVES THE MOVEMENT FOR ECONOMIC JUSTICE

“The data is like a spotlight, It increases public accountability, sunshine and transparency. It motivates increases in responsible lending and brings light to discriminatory and unfair practices.”

Josh Silver, NCRC Senior Advisor

This report was a great success. The information within proved to be an extremely valuable tool for community organizations. It could be used to comment on merger applications and CRA exams, to initiate a dialogue with lenders, and also to get public attention in the media on lender activity. The substantial and substantiated findings in NCRC’s analyses garnered considerable press attention, which in turn brought public attention to lending trends and patterns.

“The data is like a spotlight,” says Josh Silver, NCRC’s Senior Advisor.

“It increases public accountability, sunshine and transparency.

It motivates increases in responsible lending and brings light to discriminatory and unfair practices.”

NCRC has since generated multiple updated versions of its seminal America’s Best and Worst Lenders report, both on a national scale and with a local focus. NCRC has also conducted hundreds of pro bono analyses for community organizations and members, allowing those groups to harness the power of data. These data analyses ensure that communities benefit through fair opportunities in countless instances, putting into practice the credo that “data drives the movement for economic justice.”

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DATA DRIVES THE MOVEMENT FOR ECONOMIC JUSTICE

“NCRC is at its best when it is empowering, and where necessary defending, local grassroots groups.”

Matthew Lee, Executive Director, Inner City Press; Member, NCRC Board of Directors

With specific data and statistics in the hands of advocates, the quality and substance of the dialogue between NCRC and its member organizations skyrocketed. Once the information

NCRC

imbalance was largely nullified, NCRC and its members were able to

continues to

motivate lenders to commit to more and better loans and investments

dedicate itself to equipping

in communities. NCRC board member Bethany Sanchez says, “I think

community groups across the country with

that one of the benefits of being a member of NCRC is the HMDA data

the tools they need to stand up to financial institutions and

and our ability to call up any of the folks in the Research Department

challenge their behavior. “NCRC is at its best when it is empowering,

and get lending and branching analysis for an institution, and to have

and where necessary defending, local grassroots groups,” says NCRC

the confidence that it’s accurate and that we can put that forward to

board member Matthew Lee.

the regulators, and to the banks themselves, to show where they need

to do some work.”

“We’re in a unique position to talk about the actions or inactions

of a bank to anchor a community, to invest in a community, and to

“If a member calls, that’s where we focus,” says NCRC board member

support a community,” says Adams. “And we understand that HMDA

Stella Adams. “What do you need? What do you need as a member? My

is more than a tool for civil rights litigation; it is also intended to

little shop of five people mattered to this national organization so

be a tool to address where there is inequity in dollars. I know that

much that they would crunch numbers for me, that they would provide

we are comfortably in the hundreds of billions of dollars that we

me with resources I needed to understand the issue. That they would

have gotten committed to neighborhoods and low- and moderate-

support me. That is what separates us from the others, that we are

income communities, small businesses, communities of color across

member-focused as opposed to organization-focused. Our strength

this country. That’s a pretty good legacy for 25 years.”

is our members, and addressing them and supporting their issues is what makes NCRC the best organization.”

21

Sounding the Alarm on Predatory and Subprime Lending the Need for stronger Financial Regulation

I

n the 1990s NCRC began to witness and document a wave of

“…[T]raditionally underserved communities have increasingly

disturbing predatory practices and bad underwriting from

been victimized by a surge of “predatory lending” or the extraction

lenders. It is credited as one of the very first organizations

of inordinate fees and interest rates from unsuspecting clients in

to sound the alarm on the grave predatory and subprime lending

exchange for little or no financial service. As a result, thousands of low-

problem, fighting hard for tougher regulation and oversight for years

and moderate-income Americans nationwide have had their dream

before the subprime mortgage crisis.

of homeownership turned into a nightmare… No individual or family

should be subject to such unscrupulous and abusive practices…”

“Regulatory Agencies Must Scrutinize Subprime Lending,” NCRC

insisted in the 1998 edition of its America’s Best and Worst

NCRC vocally and persistently called for Congress and the prudential

Lenders report.

banking regulators to wake up during this period, unfortunately to no

avail. “From the first moments it was clear that NCRC knew that the

In a letter now famous in community advocacy circles, NCRC made a

predatory lending that was taking place was disastrous, that there

direct plea to the Office of Thrift Supervision in the year 2000 imploring

was no good that was going to come of it,” says NCRC board member

the regulator to do a complete overhaul of its regulations in order to

Bethany Sanchez. “We used to be jumping up and down and waving

curb predatory practices:

our hands and trying to get attention, and talking about foreclosures

and talking about trends and showing maps and trying to get people’s attention, and then all of a sudden the crisis hit. But for years prior to that we’d been really hitting the media and our policymakers with our concerns about what was going on.”

22

The Fight Against Gramm-Leach-Bliley; CRA MODERNIZATION EFFORTS NCRC vehemently opposed the Financial Services Modernization Act of 1999 (Gramm-Leach-Bliley Act), now most famous for including the repeal of the Glass-Steagall Act. Senator Phil Gramm, Chair of the Senate Committee on Banking, Housing and Urban Affairs at the time, was infamous for his opposition to anti-predatory measures and his hostility towards CRA, and refused to engage with advocates from NCRC on a meaningful level or allow any legislative action to curb predatory practices.

The bill threatened to greatly increase the power of financial institutions by allowing banks to acquire insurance companies and securities firms, but at the same time CRA would not be expanded to an equal degree. While banks would still have a CRA obligation to reinvest in communities, the insurance and securities arms of the institution would not.

Also, the merger between a bank and an insurance company

23

THE FIGHT AGAINST GRAMM-LEACH-BLILEY; CRA MODERNIZATION EFFORTS

“NCRC had the vision, had the foresight to see what the damages were going to be and that helped in some ways to prepare for it, to be able to fight against it, And prepare our neighborhoods for what might be coming.”

Stella Adams, Housing Chair, North Carolina NAACP; Member, NCRC Board of Directors

24

or securities firm would not have its application subject to public

defeated. But due to the tenacity of NCRC, community groups, and

scrutiny, meaning there would be no public comment opportunity

allies in Congress, Gramm and others did make compromises around

and no consideration of community reinvestment performance. Josh

CRA, including language that prevented a merger if a bank had a less

Silver, NCRC’s Senior Advisor, says, “Not only were they not updating

than “Satisfactory” CRA rating. “NCRC did great work on that because

CRA to keep pace with the changes in the financial industry, or the

it could have been a lot worse,” says NCRC board member Stella

changes that would be accelerated by this bill, but they were also

Adams. “There was a real danger of losing CRA. A real danger.”

attacking CRA.”

Upon its passage in the year 2000, Taylor told U.S. Banker magazine

NCRC and its members didn’t let the bill pass without a fight. In

that the bill “…fails to fully protect underserved working-class and

testimony before the House and Senate, John Taylor voiced concerns

minority communities.” Silver feels it was a lost opportunity to

that the community groups, CDCs, low- and moderate-income

update CRA. “Gramm-Leach-Bliley was proposing to significantly and

communities and people of color that all rely on CRA to enforce banks’

massively increase the power of the financial industry by allowing

obligations to community reinvestment would face reduced access

banks to merge with securities firms and insurance companies, but

to loans and credit. NCRC also worked with several representatives

was not expanding CRA commensurately,” he says. “This was a bad

to introduce amendments that would expand CRA to non-bank

deal for neighborhoods.”

financial companies affiliated with banks, and to require insurance

companies to disclose the demographic data of their customers, such

“NCRC had the vision, had the foresight to see what the damages were

as race and income. Unfortunately, these amendments were ultimately

going to be and that helped in some ways to prepare for it, to be able

THE FIGHT AGAINST GRAMM-LEACH-BLILEY; CRA MODERNIZATION EFFORTS

to fight against it, and prepare our neighborhoods for what might be coming,” says Adams. Despite the bill becoming law, NCRC continued to build its reputation in the halls of Congress as a vocal and effective advocate for underserved communities.

In the wake of Gramm-Leach-Bliley, NCRC worked with members of Congress to introduce CRA modernization bills. These bills would attempt to do what Gramm-Leach-Bliley did not. Namely, the CRA modernization bills strengthened CRA as applied to banks and expanded CRA broadly throughout the financial industry to include mortgage companies, insurance companies, and securities firms. The first of these bills, the Community Reinvestment Modernization Act of 2001, was introduced by Reps. Thomas Barrett and Luis Gutierrez. reen s

pan

an A

serv Fede ral R e

us to this point today and I’d like to say a special

e Ch

are a lot of people who have worked very hard to bring

airm

Barrett regarding NCRC’s work on CRA at this time: “There

lan G

The Congressional Record includes remarks from Rep.

25

THE FIGHT AGAINST GRAMM-LEACH-BLILEY; CRA MODERNIZATION EFFORTS

word of thanks to the National Community Reinvestment Coalition. In particular, John Taylor and Josh Silver have been instrumental from day one in drafting this legislation.”

NCRC knew that the prospect of Congress passing CRA modernization was an uphill battle, but NCRC never gave up trying. NCRC worked with Rep. Eddie Bernice Johnson in drafting another bill, which she introduced at a press conference during NCRC’s annual conference in 2009. One objective of these bills was to produce a blueprint for improving CRA and data on lending. This approach proved to be effective in influencing the Dodd-Frank Wall Street Reform and Consumer Protection Act. Coming on the heels of the Gramm-Leach-Bliley Act, NCRC released the results of a major nationwide series of focus groups and a national survey on perceptions of fair lending and banking practices, conducted by a bipartisan polling team of Republican Frank Luntz and Democrat Jennifer Laszlo. The report, “Community Reinvestment and America’s Attitudes on the Cusp of a New Millennium,” presented a snapshot of the public’s attitude toward financial services providers

26

Rep. E

ddie

Bern

ice Jo h

nson

THE FIGHT AGAINST GRAMM-LEACH-BLILEY; CRA MODERNIZATION EFFORTS that e sure k a m o a law t worthy here be ans to credit ce, religion, t ld u o 10. Sh on’t deny lo person’s ra t d banks based on tha atus? (Overall) t s le l p a rit peo y or ma it ic n h t e

at the end of the ‘90s. It revealed national feelings on key issues of the consumer banking industry, the impact of mergers, and fairness in lending, highlighting startling perceptions of disparities based on race and gender.

Overall, those surveyed overwhelmingly believed that white men are favored in the lending process. By a 5-to-1 margin, respondents said that between a white male and an African American male with equal credit history and income, the white male would be favored for the loan. Among African American and Hispanic respondents, 90 percent believe that a white man would be favored, and none believed a an African American man would be favored. When asked about gender, there was an even wider margin of 6-to-1 who believed that a white male would receive a loan over a white female. There was also a wide gender margin across all racial groups.

The report received broad coverage, as it exposed the stark contrast between the economic prosperity of the late ‘90s and the realities facing underserved communities.

27

NCRC’s Warnings Continue as the Financial Crisis Draws Nearer

In a 2003 report titled “The Broken Credit System,” NCRC stated,

In May of 2000, in one of many

“Using the best available data on creditworthiness, NCRC uncovered

congressional testimonies, John

a substantial amount of predatory lending involving rampant pricing

Taylor testified to the House Banking

discrimination and targeting of minority and elderly communities.

Committee on predatory and

Congress must enact comprehensive anti-predatory lending

subprime lending. In that testimony,

legislation… Comprehensive and strong anti-predatory lending

Taylor said, “under the law, if

legislation would eliminate the profitability of exploitative practices

someone holds someone up at gunpoint

by making these practices illegal. Federal agencies must step up

and robs them of their possessions, that person goes to jail. However, if

enforcement of existing laws to promote full product choice and prevent

a lender uses deception, high-pressure sales tactics and other abusive

product steering.”

means to steal another person’s home – their most prized possession – the lender profits. Predatory lending is no different than robbery

“While subprime lending grew, NCRC member groups were some of the

at gunpoint, and our laws and regulations must adequately reflect

few sounding the alarm to the regulators and to the public,” says NCRC

that fact.”

board member Matthew Lee.

In 2001, NCRC released an anti-predatory lending toolkit, containing

These persistent warnings – which were substantiated with evidence and

policy prescriptions and recommendations to prevent predatory

data — went tragically unheeded by Congress, the banking regulators

lending. The toolkit provided specific examples of financial institutions

and the financial services industry. However, Federal Reserve Chair Alan

demonstrating troubling practices.

Greenspan famously voiced concerns about the growth of predatory

lending at NCRC’s annual conference in the year 2000, in remarks that

Also in 2001, NCRC established a Consumer Rescue Fund to assist

were broadly reported on in the national and regional media.

borrowers. The Fund gave NCRC insight into specific cases of

28

“If NCRC and its members had been listened to, the foreclosures that have devastated our communities and ruined the global economy could have been avoided.”

Andrew Cuomo, Attorney General of New York State, 2009 letter to NCRC

abusive lending: products that were not needed, fee gouging, steep

In May of 2010, at the height of the financial crisis, Senator Chris Dodd

prepayment penalties, steering, and other predatory practices. The

recognized on the Senate floor that several years before, NCRC’s then-

Fund, in addition to assisting and counseling homeowners, allowed

Chief Program Officer David Berenbaum had testified before

NCRC to document these abusive loan terms and conditions and

the banking committee on poor underwriting and its impact on

present that data in congressional testimony, in comment letters to

communities, local governments, and the safety and soundness

the banking regulators, and elsewhere. “Both on a policy level and a

of the financial system. “…[A]ll of our members in the

programmatic level we were in the thick of the fight against predatory

National Community Reinvestment Coalition

lending,” says NCRC Senior Advisor Josh Silver.

have been sounding an alarm about

poor underwriting,”

Several prominent public officials have publicly recognized NCRC’s

said Berenbaum in that

prescience in forewarning the crisis. In a 2009 letter to NCRC, Andrew

testimony. “Those cries

Cuomo, then-Attorney General of New York State, wrote “The first

for action fell on deaf

to warn Congress, Administration officials and regulators about the

ears, and here we

dangers of subprime and predatory lending, the NCRC proved sadly

are today,” said

all too accurate in their warnings. If NCRC and its members had been

Senator Dodd.

listened to, the foreclosures that have devastated our communities and ruined the global economy could have been avoided.” nke

en B

erna

“NCRC talked about this way before anyone else did, and certainly gave

an B

it more emphasis than anyone else,” says NCRC board member Irvin

e Bo ard C

serv

was a problem.”

Fede ral R e

time. The advocates had it right way before Wall Street even knew there

hairm

Henderson. “They didn’t listen. It was an extremely frustrating period of

29

NCRC’s Testing, Housing Counseling, and Foreclosure prevention I

n the early 2000s, nefarious practices around poor credit

papers and audits, to influence public policy, and to challenge

products had exploded and ballooned out of control. From

subprime lenders.

single premium credit insurance, to add-on products, to

incentives and payments to brokers, to the disconnect between real

NCRC conducted fair lending testing on a host of issues. In response

risk and what was being charged for interest and fees, the mortgage

to steering and pricing issues witnessed by the staff of its Consumer

industry was running amok. In response to the rampant fraud and

Rescue Fund, NCRC conducted a systematic audit of the lending

predatory practices flooding the marketplace, NCRC began to

industry, looking at how major banks were treating consumers.

strategically conduct testing.

Additionally, NCRC tested how African Americans and Latinos

with prime credit were treated when they applied for loans, and

In 2001, NCRC launched the NCRC Consumer Rescue Fund. The

documented steering to high cost loans. NCRC also conducted the first

Consumer Rescue Fund was conceived for housing counseling

fair lending audit of mortgage brokers and issued the findings.

activities and refinancing problematic loans for consumers. The

Consumer Rescue Fund initially focused on several states with the

NCRC’s testing revealed that consumers who should have been

worst predatory lending problems, and gradually grew, eventually

receiving prime loans were instead receiving subprime loans. NCRC

evolving into NCRC’s Housing Counseling Network.

broadly challenged the misrepresentation that subprime loans help

people to buy homes, because the majority of the subprime lending

The Consumer Rescue Fund allowed NCRC to identify emerging issues,

was refinance, a fact which the organization highlighted in its reports

and document problematic cases. This led to systematic testing,

and other materials.

research and reports, and media exposure on these issues. NCRC

has effectively utilized systematic testing as the basis for meaningful

30

“We’ve taken on predatory lenders, we’ve taken on check cashers, we’ve taken on whoever handles the money, and when they abuse the community, NCRC has taken a stand and has been vocal about it.”

Pete Garcia, President, The Victoria Foundation; Member, NCRC Board of Directors

31

NCRC’S TESTING, HOUSING COUNSELING, AND FORECLOSURE PREVENTION

NCRC’s extensive research showed that people in communities of color were more likely to receive high cost subprime loans.

In its 2003 report, The Broken Credit System: Discrimination and Unequal Access to Affordable Loans by Race and Age, NCRC presented data analysis on subprime lending in ten metropolitan areas that showed substantial evidence of price discrimination on the basis of race. In subsequent years, NCRC released a series of reports, Income is No Shield Against Racial Disparities in Lending, that documented high levels of subprime lending to minorities across metropolitan areas, even to middle- and upperincome individuals.

32

NCRC evaluated problems in the appraisal industry in its report Predatory Appraisal: Stealing the American Dream, the first document to not only raise the implications of problematic appraisal issues for consumers, but also to show those issues to be a safety and soundness risk. This report helped to establish NCRC as one of the foremost policy authorities on appraisal issues.

NCRC also cast light on the foreclosure rescue scams that became prevalent and pervasive as the foreclosure crisis hit. A flood of consumer complaints to NCRC’s housing counselors led to NCRC conducting testing and “mystery shopping” investigations to document the treatment consumers and homeowners were receiving.

In 2010 NCRC released a report called Foreclosure Rescue Scams:

NCRC’S TESTING, HOUSING COUNSELING, AND FORECLOSURE PREVENTION

A Nightmare Complicating the American Dream. In this report NCRC illuminated the excessive fees, deceptive practices and rescue/ modifications scams that many homeowners face as they attempt to prevent foreclosures.

NCRC’s Housing Counseling Network, a HUD-certified national housing counseling organization, proved invaluable to thousands of consumers, as many homeowners struggled with mortgages and potential homebuyers needed help navigating the process of becoming homeowners. Of the Housing Counseling Network, NCRC board member Bethany Sanchez says, “I think that the leadership that was developed and the relationships and memberships that came through that network, and of course the borrowers who were helped not only by the in-house counselors at NCRC but also to even a greater extent the counselors who are part of that network, that was an important accomplishment and one that can never be minimized.”

33

NCRC’S TESTING, HOUSING COUNSELING, AND FORECLOSURE PREVENTION

“NCRC plays a vital role by engaging its members to ask questions and identify investment opportunities in their communities that could be turning their community around.”

Ted Wysocki, President and CEO, Institute of Cultural Affairs in the U.S.A.; Former Chair, NCRC Board of Directors

34

In 2008, after having been shuttered for a decade, National Neighbors,

to draw reinvestments into communities that were suffering

Inc., the oldest national fair housing organization in the United

from the recession. The Regional Organizer model evolved

States, re-emerged under the leadership of NCRC. National Neighbors

from NCRC’s Economic Justice Campaign of the mid-2000s,

provides technical assistance to NCRC’s members in urban, suburban,

an initiative to become more involved in economic issues in the

and rural communities to promote economic mobility and ensure

electoral districts of members, or possible members, of the

fair housing for working families throughout the nation. In addition, it

House and Senate Banking Committees. Through this campaign,

provides private enforcement, education and outreach, fair housing

NCRC saw multiple successes coming out of providing experience and

planning, comprehensive voluntary compliance services and testing,

guidance to members in the field, and the economic crisis brought

and builds partnerships among communities, real estate providers,

about the evident need for an intensification of these efforts. Former

financial institutions, and other key market players.

NCRC Board Chair Ted Wysocki states, “NCRC plays a vital role by

engaging its members to ask questions and identify investment

By 2009, NCRC was beginning to add Regional Organizers to

opportunities in their communities that could be turning their

its staff to build members’ capacity on a local level and begin

community around.”

NCRC’S TESTING, HOUSING COUNSELING, AND FORECLOSURE PREVENTION

35

Pushing for Financial Reform to Protect Consumers NCRC’s Work on the Dodd-Frank Act

I

36

n 2007, the United States plunged into what would become

having a large influence on much of the content and language that

the worst financial crisis since the Great Depression. Years

ended up in the final bill. “Language in the bill came directly from

of reckless, irresponsible practices from the financial

NCRC,” says NCRC Board Chair Robert Dickerson, Jr. “I think that

services sector and Wall Street led to the collapse or near collapse

Barney Frank understood that we knew and had the expertise, and so

of several major financial institutions, the collapse of the housing

there was a trust factor there between Barney and NCRC’s think tank.

market and economy, and resulted in widespread foreclosures, the

That’s how you could position yourself to actually influence the bill or

loss of trillions of dollars of wealth, negative home equity, and high

actually write a portion of it. That’s one of the things that NCRC over

unemployment rates.

the last decade can certainly be proud of.”

Many of the problems that NCRC had been vocal about correcting are

NCRC had a prominent role in partnership with other advocacy

now broadly recognized as key drivers of the financial collapse. The

organizations in contributing to the development of over 20 different

predatory and subprime lending and bad underwriting practices that

position papers on topics ranging from the role of credit rating

NCRC had been fighting for years were at the heart of the meltdown.

agencies, to appraisal, to responsible lending and fair lending

accountability. NCRC worked collaboratively with other like-minded

Having alerted and met with the regulators on the dangers of subprime

organizations to develop robust and consumer-oriented policy pieces

lending, spoken out on nontraditional products, and raised concerns

that were instrumental in giving consumer advocates a unified, well-

on valuation and the reemergence of redlining, and many other issues,

honed message in the debate surrounding financial reform. This was

NCRC was a key, trusted voice in pushing for strong new consumer

critical in delivering important new consumer protections and a new

protections and meaningful financial reform. This history led to NCRC

agency, the Consumer Financial Protection Bureau (CFPB).

“Language in the bill came directly from NCRC. I think that Barney Frank understood that we knew and had the expertise, and so there was a trust factor there between Barney and NCRC’s think tank.”

Robert Dickerson, Jr., Executive Director, Birmingham Business Resource Center; Chair, NCRC Board of Directors

Ultimately, the Dodd-Frank Wall Street Reform and Consumer Protection Act included extensive content from anti-predatory lending legislation that NCRC had pushed for in the years leading up to the crisis. Many of the abusive and unfair products and practices that

p. Barney

rd with Re

NCRC Boa

Frank

NCRC had long opposed were abolished in the bill.

NCRC also played a key role in the mandate that financial institutions release a better quality and quantity of data on their small business lending, in particular the race and gender of the owner of the small business, the revenue of the small business, and the action taken on the loan (approval/ rejection). Throughout the previous decade NCRC had drafted language on the data requirements for various CRA modernization bills that didn’t pass Congress, but much of it ended up in the Dodd-Frank Act. “Josh [Silver, NCRC Senior Advisor] wrote most

37

PUSHING FOR FINANCIAL REFORM TO PROTECT CONSUMERS

“Across the country, NCRC member organizations are out on the front lines fighting for economic justice. Your efforts to help revitalize our communities, protect individuals’ civil rights, and promote safe, stable, and affordable housing are critical.”

Sen. Elizabeth Warren, 2015 NCRC Annual Conference

of that,” Dickerson recalls. “I can remember us at board meetings hearing from Josh and talking about how important it was.” Despite the mandate making its way into the final bill, the CFPB to date still has not released a rule on the collection of the data. However, NCRC continues to work with members of Congress to press the CFPB to initiate the rulemaking. NCRC also conducted major reports for the Appalachian Regional Commission and other clients that demonstrated the power of small business lending data but also the critical limitations of the current data.

The Dodd-Frank Act also included language on mortgage lending data enhancements from the CRA modernization bill that NCRC had helped write years earlier. As a result of the Dodd-Frank Act, Home Mortgage Disclosure Act data will provide important new information on loan terms and conditions.

And in a monumental move for consumers, a government agency specifically devoted to consumer financial protection was

38

PUSHING FOR FINANCIAL REFORM TO PROTECT CONSUMERS

Rep. Barn ey Frank

created under the Dodd-Frank Act. The CFPB was given primary

including Los Angeles,

rulemaking authority over consumer financial protection laws,

San Diego, Boston, Minneapolis, and

stripping that duty from the prudential regulators.

Washington, DC. NCRC board member Bethany Sanchez says,

“Promoting responsible banking ordinances with a model ordinance

NCRC was a champion of the agency during the debates surrounding

and helping the people who were undergoing the campaigns

financial reform. In his first day on the job, the Director of the newly

and supporting them with organizing support, I think was really helpful

created CFPB, Richard Cordray, called NCRC to offer thanks for their

to the folks who got those campaigns passed as well as those of us

work getting the Bureau created, and in getting the Bureau a director.

who worked on the issue but still haven’t had a clear victory. We’ve

been able to have some progress and educate people on what the

Responsible banking ordinances (RBO) are another strategy through

upsides were.”

which NCRC has pushed for financial services investment on a local level. In recent years, NCRC has been a leader in organizing community advocates to advance RBOs, which require banks seeking municipal deposits to demonstrate a commendable community reinvestment and fair lending record. Since 2012 alone, NCRC has helped to advance RBOs in several cities,

39

Community Reinvestment Goes Worldwide Global Fair Banking Initiative

I

n 2004, NCRC and several community reinvestment

partners, in particular Institut für Finanzdienstleistugen (IFF) in

organizations across the globe launched the Global Fair

Germany and the Centre for Responsible Credit in Great Britain. “We

Banking Initiative (GFBI). The initiative was intended as an

wanted to work with countries in order to protect them but also so that

international collaboration to advance fair and inclusive financial

we would have partners around the world to help with disciplining the

systems everywhere in the world, along with promoting best practices

global banks,” says Lewis.

and responsive innovations from financial firms necessary to meet the evolving financial needs of diverse populations. Between 2004 and

The GFBI had its roots in an experience by John Taylor a decade before.

2006, nearly 600 organizations in 79 countries participated in the GFBI.

In 1994, the U.S. Congressional Black Caucus invited Taylor to South Africa to meet representatives of the new, post-apartheid government.

40

The initiative was led by John Taylor and NCRC board member

Government leaders were working at that time to reconnect the

Maryellen Lewis, who has served as Chair of NCRC’s Global Committee.

country to the global financial sector, as well as improve the financial

Also instrumental to the GFBI was NCRC board member Matthew Lee.

opportunities available to all of the country’s citizens. While on his

The initiative was made possible by the strong support of several

visit, Taylor discovered documents with American Bankers Association

“We wanted to work with countries in order to protect them but also so that we would have partners around the world to help with disciplining the global banks.�

Maryellen Lewis, Chair, Michigan Community Reinvestment Coalition; Member, NCRC Board of Directors

41

COMMUNITY REINVESTMENT GOES WORLDWIDE

letterhead detailing why the U.S. Community Reinvestment Act would be a bad model for South Africa. This discovery made clear that while NCRC and its members were improving the financial empowerment of working-class families in the U.S., there was a need for an international collaboration to fight for access to fair lending and capital for all people.

The GFBI kicked off in October of 2004 at the first working group conference in Rio de Janeiro, hosted by NCRC and the Woodstock Institute. Representatives from nations with CRA-type legislation gathered to discuss community reinvestment work in their countries and set the groundwork for dialogue and action to address common concerns. The conference provided the thrust to pull together the worldwide movement and set the standard for future action and conferences.

A year later the NCRC Annual Conference included a global forum attended by reinvestment advocates from over 20 countries. The conference gave international attendees the opportunity to learn about the latest CRA developments and economic justice issues in the U.S., and included several panels discussing how these could serve as models for other countries.

42

COMMUNITY REINVESTMENT GOES WORLDWIDE

Also coming out of the NCRC conference was the foundation for

Additionally, because of NCRC’s lead in building the campaign for

a 2006 conference in Brussels, which would ultimately attract 150

a worldwide just economy, the United Nations granted it Special

representatives from 30 countries. The Brussels conference was made

Consultative Status to the UN Economic and Social Council. The GFBI

up of representatives from national governments, the European Union

also led to NCRC’s increased involvement with multilateral institutions

Parliament, international labor organizations, central banks, and

such as the World Bank.

community groups. It saw the launch of the European Coalition for Responsible Credit, an organization promoting fair lending and credit

The ideas, practices, and coalitions that came out of the GFBI continue

within and between countries in the European Union.

to make a difference in lives around the world and fuel the cause of economic fairness as countries become increasingly intertwined

The original two-year initiative was a resounding success. By 2006, 15

through the expansion of the global financial sector. “NCRC was really

conferences or events involving the GFBI had been coordinated and

out front in saying, we need to have these kinds of protections and

attended by thousands. NCRC board member Matthew Lee assembled

obligations on the banks and all of the financial sector all around the

an international Compendium of Banking Laws, a review of banking

world, because finance is global,” says Lewis. “There has yet to be a

laws and regulations of 37 countries. This was an invaluable resource

voice for consumers and those populations excluded from mainstream

for community groups and government leaders, allowing a side-by-

banking services [in international agreements]. We need to join with

side comparison of laws for evaluation while drafting or reforming their

our partners to create a really, truly powerful voice that can begin to

countries’ financial regulation frameworks. Finally, the GFBI produced

influence those international conversations.”

five briefing papers for NGOs and governments outlining strategies for promoting fair access to capital and ending predatory lending.

43

Don’t Bank on Wal-Mart I

n early 2006, Wal-Mart attempted to enter the world of

banks, American taxpayers and the U.S. banking system. These

banking by applying to the FDIC to become an industrial

concerns led NCRC to act swiftly to stop the application.

loan company (ILC), a special-purpose bank with limited

regulatory oversight, claiming it was simply to process credit card and

As part of their campaign to halt Wal-Mart’s banking initiative, NCRC

debit transactions and electronic checks. Unlike other banks, ILCs fly

led over 200 protesters to the White House and the FDIC in a “Don’t

under the radar of federal regulatory agencies and are exempt from

Bank on Wal-Mart” rally during its 2006 Annual Conference. NCRC

rigorous oversight procedures.

board member Irvin Henderson remembers, “We shocked folks in that they weren’t ready for us to be that strident.”

Given that Wal-Mart had tried on several other occasions to enter the financial services market, NCRC was suspicious that it had greater

This “in-the-field” march was a step forward for NCRC’s style

ambitions to move into the financial services sector. NCRC believed

of activism. Of the protest, NCRC board member Stella Adams

that an ILC of Wal-Mart’s size would pose significant threats to low-

remembers, “I was so proud of NCRC.”

and moderate-income communities, small businesses, community

44

“From its poor treatment of employees to its predatory pricing tactics, Wal-Mart consistently undermines communities and should not be rewarded for it.�

John Taylor, NCRC President and CEO, FDIC Hearing, 2006

45

DON’T BANK ON WAL-MART

46

DON’T BANK ON WAL-MART

The protest had measured success, altering Wal-Mart’s attempt to

Wal-Mart consistently undermines communities and should not be

dodge CRA obligations. Thanks in part to widespread media coverage

rewarded for it,” wrote Taylor.

of NCRC’s rally in front of the FDIC and White House, Wal-Mart eventually agreed to abide by CRA. However, it initially promised to

Of the 56 testimonies made before the FDIC, 47 concluded that Wal-

only serve the needs of the residents of the Salt Lake City MSA.

Mart should not be trusted with a banking charter. The issue also drew 4,000 written comments from the public, the largest number

In April of 2006, John Taylor and other NCRC members testified at an

ever recorded for a bank application at the time.

FDIC hearing and urged the regulators to consider Wal-Mart’s character when considering whether to reject its application to become a bank.

“From its poor treatment of employees to its predatory pricing tactics,

47

NCRC’s Recent Major Campaigns T

he reputation NCRC built over the years has given it the power to influence the highest levels of the financial and government realms when it comes

Capital One Merger In June of 2011, the credit-card lender Capital One announced

to issues affecting traditionally underserved communities.

plans to purchase the online bank ING Direct, a deal that would

“NCRC’s ability to shape and influence national policy is

make Capital One the fifth-largest bank in the country—only

at its highest point, and has been over the last several

five years after entering the banking business. Review of this

years,” says Robert Dickerson, Jr., Chair of NCRC’s board

proposed acquisition would be one of the first test cases of

of directors.

the Dodd-Frank Act’s mandate that when examining a merger proposal, the Federal Reserve must consider whether such an

“NCRC is the go-to place for policymakers,” says NCRC

acquisition would create a “too big to fail” financial institution.

board member Maryellen Lewis. “I’m just really impressed

NCRC was prepared to make sure these new regulations

with how much influence NCRC has right now as a national

were followed.

organization on Washington policy and how much influence the members have in the states.”

48

“Capital One, obviously, is a financial giant...whose influence and power probably outweigh the collective resources of the folks that opposed the merger. but NCRC forced the Fed to do something that they, before and since, have been reluctant to do, and that’s have public hearings to talk about...a huge merger of financial giants.”

Robert Dickerson, Jr., Executive Director, Birmingham Business Resource Center; Chair, NCRC Board of Directors

49

ital ld Cap u sets. ow co s a in .H llion on or so i r t i 6 $2.2 300 bill Finneran said in ING’s $ with age ss to stab ank measly One’s b s t eng “acce r e a t o o a y ? n t s l k es andStradit ris ach ionalnecons e on ted S it do an apital O ds Uni will hav ystemic hat oldmties.” t s C s len e . e e s On ness Capital One’s busin argu that a G ivatives ion that creamodel ‘notnesoun his i itut al O ankingd,’ting der insIt’s t t i community groutps p unclear exactly w tell Fed Ca e of b ng wri ver, p like sit-taki n m ness will benefititiothe oreo lex ty o oes, quis y esaid

By Danielle Douglas M e comp anley d ple, dep ards.

One has acplainl t c t d c i m t S th i e v i ir gan eas cred l proofitHSBC lend GitsDpurch wilase Mor ng to b rily on st of r s e IN usset e it to i September g fo the make a Te20, 2011 – Befor at thalbecais ngban in s geo a ysparse i rimacrowd at the h , i c t d l p Feder n n a d a e ve’s first e Reser sai under odeale D three public m lecountry. f fin rt-in F of erthe monhearings, Capit o dR haveal One One nancial Corp.eofficia or t am urce ne s Filysts sed ls pdefen ded the ital s le soof in the sh al O napropo p purch t U b ase a i a a p p e t s ING DirecBt yas a marriage ofSosimpl Cape,iketradit m Ca ional Finneran stressed the ing on C oreinstitu M a d of a tal O rrowtions Capital One ove that pose no riskacyto e anm ill m Jeackfinanc wial eagreat the fifth system Sncbroupublic l On, but c usthe son R ’s Mnk a W h a t t d i ashin n k e s p benefit. W tiny anada ivitie an serve as a cataly C tgeto In F d-Fra llct Coadlist est b ASHIN t vt erfor f a f a l d g o GTO n s e creati n i id a on i and h econo id t,h v . t Do t e a snmi it wil e onlinguio N, A isYet e m D k G r e o . a c n N r l u comm e I M Counity e gumst the credit card O rp.’s group onana irbeacnt ki anekxpsaiargue nndthite d that ital 27, 2 ght? giant is ay hav alitfiin even b p t p a e S la simpl s c n 0 C y i b m o using revsition He annou usin c $9n billion , l tnk By ncedDaia10-ye nlithe is 1r 1 – T iewhoo to itshecardnbusi11 – il.” swer ity. The ire tIhNaG se, sItNba oitbs.uy acqui t cou styys tahnedo laifersgallow ING W f Cfuel ness, 3, 20 fa G ofwhich acould ed ir grow n billion pitalotdestab comm anFeadeilize Grolarger rm aluR nldi thur acqu inarnew ase system guedu eposDto ust 2 o big to fthq- uein ect U any s i e n h O o d g t f m p t c e io f u n the r o s i e N e n e n . m t u invest A , hat rasl s. o rve ments th llion p pm ut c, oas well na. loC Fpin s SA, aCmlaidrityV’satU g “to e icaantci ial lowio.S llion ital One 0T nu uire 0 hbei Fe ditpiosco bein n aN “Ctoolomode aplinl rate-in c .2 bi p nsa cg d setd, it req hief alrco n $2 mher rom ahl oOrunse’sof al Oen-beankdin d $9 ake Ca tha“Neit f e o t c t e s i u Capit m a n t annou al One p t o nced nor ’s ING ionpole compcre g es the tmerge it m l Direct provid op ore apittypes m n ttahleOnthereeed a imounir Db.C its la mereat ny. Cap useesCthe of critica A pr t would with m e c.,ol ofinanc pservic “Te N indisrup eca of which wer nd intsnew jobs. rhoepoF es ethe c s naSpeipial C Re canonsignif be , icant scaol.mTpa gs to htion - tmh his is aty to lo ecould e a2t tto e Dire d State t pose n n v h s t i x t . o r O e risk i lp e financ s s t d i m e h , tial oreucn credita si te es ctq.u5i.reI fuitthe y wil ityrein hheestabil caorllU.S.,” b0i;nC rFinne desctto sJohn ic g Ad Banki io o ng ncogener Uni redsts al R cqui derG. t n e m l n a d a a r ran i b m o g Jr., s d i d it e t o f al analy s couns t n m d o i -c u elonand nld secret e oredinloa ao acn, th Ac rfptuhbeli anitsio rd l t Csuspe sthaerate Ho ary Sepcorpo in lW nk McLe esCagestureentowar t a e ore m the F -Frafor o r f c h r t f r r o an-ba t . some e sed c o e e r Capit k u 2 al o e a p One, c F s s b d 7 said d mme ed sa at the ;eand ng pm th inshingeat ts al Onch oc Tic riF its oefHotel But ance fro Dodd teRenai id F meeti -de ititmen t on t today iSon- held r tdoi owcomm i et,tocuund Washnington e s m he ssanc ef r po hiceally . it hais trat an iFthrac ne, lits rra clea ator. Th h the sy hwe hbeetnhe d, in a no en s,h tem dprhoapvoe sa eexotpelnedwedhisnicsistcho owebdilli sitw is selt, s s t l t y e g ic u s s i r l l tphro 0. T the e all eeslaate on in ea the a t pa u reg rve we weigh Analysts and o ’s l c n p t a r c cash o a Fnreididenti o creditof 5u8gh O sco e- tiobnank d qsutiistuittors have i t regula . t e u d a s fied o a O e e t n a y, said cardresecuri ioal w k “Co ha k int l R di ct. - Na the same time intertwined con trigge asn bloc ties the alikely e ris lsoaap d $2 ilol rptrheica’s apitrnfor it wa financ t c F.H.1A2.. ntebnudssine s aC utom nnoud oduc next If th must be ntsetso ial crisis, co s e wshal oen C means fAmer s e d a i o n h a and e an c f t Capit d One HSlr unde unity rimin enesegme devodc bynt, deal ecaisi -Frarnisktoo entrenchedliin bthe f a BeC Heor t toJohn mrstand isc Ca ers of with other financial tdr,edpresid c smuuc- its toCthoemsaid itsTaylo s ye B s ent and chief execu b o s p i a o S it m h s a tive m h p e of a i d a .

Natio o D e s u nal l r n t y Reinvnestme l Ccom, psay as incrtehat thb- inst msionbecauOne, inun Fed tion Comm whaeunity ntetCoali ona tion. asedaga Fran d R ip The acquisi M a statsy ps to e r eal entit asn. ct oan operations, not only would em e Na e .the adls ky t(hD o raa k io It tory grou ve lowxetend theas risky ad impa . ss.) h s notn b o d-Fw comm . ha have s tion w saidinitority t“oW p , bden d a s t p o o e “Cap h r i l v k ital o l One’s e b D l m busin p n s e e d e i fsound esaid. hess mode its ag ,”erhe a delie e r l is not p a n ig b ? b cg e b u n i F u e m h t 0 d a t h o i “In r e s 5 a r g n po$ssib bigainst theyny otorems vh e u , w told 2005, tdg total their failure be a real possibility, dthe nOne d dow edresr, cby te that th anyg away bigg world ios hasn that etwas le sc fiee t eres Capit i it g i t tn movin s l a i e s n d e l o a r a o d i r t o v a udch a bhenes mmu atnhda erse e cre w mo strate cl mono Cohigh-ryisk its ity from to n . ...s udiversifying owe gy os- ffeits muancestmen ralrreeajde e it has line ctbs,een hsiaidl cw riseislook fo ities andil e all ing pra tn’ssoduepn b s c but it would also ripple across u i c d a Com einvq n r in i k i w t i e b c s ankperce ard b t an tane n“ca R to th Dbusin es. oAto nda 55 iretcicess - finant l Onsitoircom o tannt mun ch b hity tradit heam eU s areil-ed tso to tell nity revapita“Ye e r rto isbkt45 - per.S IyNstG credit io an. cf-card C iewllay imp d an.y”su e g e tateum s u e n t a n n d in rem s s i a n a s danl oO u i. em ias ia l ls oups th mamica gro rl ebea ucl the economy, bringing down other eq i en argued n th nacmer card cent ly tothat itla bankiC e n gerhy oshin ng oavpeirth ednbeyoaf gthescnokre” rwitehnoug tly i consu sybsat s.aW C p ial re ludes aenis like s: credit ficanratio. onl t t , a i d c u o h o d n t l n mn eva es the scred t nit card “Tni ouarlcO on Sixlliyears on and spo r itsbcilrel adtd is is ple elyatti asse k said. it es nofbut sinluataio d sig rhethF isethree sxrit institutions in its wake. bi dmer3al0banks BC... 75 seediin we unity, hreusm later s heeaxcp n n orlfieth i S T Capt is o l a $ h , esh R H r l gian e l e m e e ’s c mm sim a q Ein fin s toply The F reov hsee ve-incom C anc entr tof panloyan vo er withendoim ’slarg tseubsCoom oed a ance it oving ectoru. ir t l a irits gf fHirSmB perce ia f h t M y f A .

C a t a n s o . f a ls m lsa nd l in ou e g u cates to fusin All s th come nHtia ,” t billi o p . a s n o e i ’s i t t n still the b o e d i $9 a i t . s o from a e in t t n ,itsING nO b id onS ed Se tcaentrisae to creditcomFe owy aincre . Natithatof th n cemeer cr si voice nt ceoacqui United nitcards. taclustosum e in it ”ill r l dCcaopniacq iscnomm rketaseedm me tion itsorin e th meto onuisi se muan ceenconcerns the U share w n sthasfuel esitm i rcn aobuncresdandliabout s n o v Beyond too big to fail, there were also significant i i “The o m loan to itmieask. t othevrw a r a earckoent d its out trtfo t lel arsetm ncard y n o r r Som t e a i e n suStella corednt vm oitnses, ilines mU po hebus d e m l e ING ne c d Adam w s, o d the e e u n r O in i r e a advo sult .S. la m code ca al On l.r, but oclu e wNatio s sco ommun eudsittomch addto u-nity w makew nal rcwhi whether there would be a public benefithoantoINthe previous G cmerger. if allo grh ll -rAssoc iation sue wed . apit In es of risk s r ihagvepushea rdtin ve to Diredceta’sl, FC ertschaardveisv percent hegmthat it oups aitotensal rC thithe for t Adva t ncem n o t a im ent i i f o d ting ot re lettre a is 7 a h e icedlargersts t dc o om isa pto cgro e wh stink o t ge es b ed o fendnoe’s clowr kany esat r?re enbtw tColor en m So“aNddldintgakte m onucgege frates s,” re plending t Peopl of a ’ p e r mergers, Capital One had a history of dropping to n u a t T a n g r s a e h g bighis e. “W cing s n taebreo ads acou ment ch g yc sizab snhyofuinnangcettionuscarnisdiss w e wtabi nityhygd s J perldeydes tmthaebl ng committee -in suuhousi h m ia i le o alluowtlize l i ment respondin9une comm tosm deal gore rreisdkuc ncliaserv mo n h —North of th ic g toof ti e t a A s ow its hings oman in u ho p od tchairw ds a edsmall sys and moderate-income communities, communities color, r.” nal Cent tc,aoand e acqthe ut laitn Z e finions.”ome es n rs wp by gianCarol o e ib d aatiolinkretem i e l e o e l d uisit l s Nio f m t e anitds M th e, and s ot be p o INnsu almo ina, o raised t p cons p c s . o Cons T e r o n d G r o cernsmthat hat tt st 60 a iv p n o . Capit ’s Juwould n u er n cal One ay n 0 cdoasm itsyesubpr has k size a stem. ttshians eRm ne 16 expan ime businesses shortly after an acquisition. of the have Atmthe iek ity wa advtime erica proposed - l One bacredit y n anen occard voeuh rity u Am sg. to the detriment ates alendin ial s . The O ommeurncornetraib s rmino teum con atunitie eof pei-ta comm n s, n In a le rged the which a s c R e a n k a v l C i l c n d C e Rbank has derad. ines, Fed t sthe tter s e loo o the fi is criter ould will e o slo ep. Barhne preye Fof entU.S. merger, NCRC had filed a complaintRewith Department t idel l On p. F the h and c w A se t efyaiFl”ragnuk Capita ortance meet t ons, it w est ww.n un Servic rank, the u g. 17 to edcoaw . o i o p://w g p t t r ( o d r i D t B r s Fed top D lunity R la is .,nNationa im es Co g ejece • htt i Fe i u n M e a d b o f q l Comm C t h ti a h c t o li ment C ediscriminatory ughly m , oalition • http:/t /www.n moc “too hairstmto t theesas caq l sOs.)ne two aeinvest Housing and Urban Development alleging racially mit Coa crc.org • 202-62 erica en taitio the on tteh aenctB edenn BCapuiis the c examine tee, said raot w Am r vestm e n o “ ly, ernhaantkaften. ank of Rein g y u it n by th nsolidatio the impac careinstheorcuonHo s i n e u lending practices that violated fair lending laws.

These pastldbehaviors e pris Fines t exet, to B t n mm l Co mand resulting of bank this pNuorct sur behttlaykneont aankcia nl ona ing a ba ating Nati quteo thorssets,anhkarsieg wpitip s lendin ck” and h resp

and unresolved allegations threw question e pe a the g to lotheconotion m b ththat In ainto w-inc pliansctiellwb rovision e ct to n int o ome ervie

w Fr neigh ith a fede f credit iday, merger would have any public benefit. ral la b

orhood John w s.

Taylo r, chie

f e x Natio ecutiv nal C e of t omm unity he Re

“NCRC is the go-to place for policymakers. I’m just really impressed with how much influence NCRC has right now as a national organization on Washington policy and how much influence the members have in the states.”

Maryellen Lewis, Chair, Michigan Community Reinvestment Coalition; Member, NCRC Board of Directors

“We already have four too big too fail banks, why make a fifth?” said John Taylor at the time. “This is the most important test since the passage of Dodd-Frank of whether or not the bank regulatory culture has changed in this country.”

NCRC board member Gail Burks summarized the importance of the Capital One campaign as having “literally touched on everything that we do, because of Capital One’s reach across consumer and business lines.”

One of the most troubling aspects of the merger was the fact that 75 percent of Capital One’s income came from credit cards. This emphasis on credit cards in Capital One’s portfolio created a lack of diversification in its income base that posed a significant risk in the event of economic turmoil. In a financial crisis, credit card debt is often the first type of debt to be defaulted on, and if one of the largest banks in the country were both severely dependent upon credit cards and at

50

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notly n-b hsaat aseecdt Na tiona usap sid lC kising llow -eing Capitaol mmunity R btu r s e in steim einve s ne to yr n by ycreas would inO st creas purchase ment b ting a ead t e e n the the ris large eh elgeula th r fina ks to ING toom ealth saolnC rs should of the fin ncial instit the it thsata u b n lock tion cial s itie e t re th y eins.v n, quires Capitea merger, osrtem. He l a o t O le ne to a-clairtdi coe the inves ast t in sm plepndoing,”tphaeny acquirin a said. g ban h t ks so anytly the is it can do n e n tihfi-led alyO $9 bil in a r s g esk lison f t b a l a 2.8 c nG nk in t billio Forr a I N y he dnced dd n- s tock Direct U U.S. by oplan in orldD toabluly . The M SA—$6.2 ings sic c t y L i PL m ethe .S. c ean, Va., yste C fionr acbou$tU 5$20.6 bredit-card ment ant s n , t s illion r a . pmoent pearideittrh oriod anesspsecetststh.e”F l m d hold ionaed’s s a efits n in Naht ea’sring deciFor s lioof e tlhe e yth2is01tr2a.ns ital On al On. e a c p b o c it a tio nom p s t C a n n li e .

C e t y s o o.A w h. mng oeucrau owiltl behseigF.H ur cusngt.hI,tb sitnorgyr,” afldadt e entthoef ct o mnbifiniceadntl,e y d o l m c c r e t ly h p e iv 1.5%1 pe ats itthw anpeop t n o il elp y h s atht atheity fwdaenpoestitheylhremain n c s u D in mgm“toanso, dsidn-Fraagne.nationwid e lo o bigortg k fina to fail n ne hese rd a m .” ital cOial- less o etsapffrior Cap ns, but ber, t a ment auciqnugistith me loa emem esioo R s g c is atrhat ng h ns, itrds. y ex nity n maksiervreedloitwca ht apsart b apital e c e C n r h a g . c k w offerin ignifi ending onal s l ti d rearsn ofausused in bprime ing Na scale c ppryo,rstu orrow rime freom p wfaacst,”dsaatid o b b u re o utatphitaon the s esf pjobos rtyo, bC 5 ecdoonwn l One, at r omy e pcroedmploaw

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The risk of setting a dangerous precedent with the merger required action.

NCRC and its members opened their salvo by presenting the Federal Reserve with two demands: extend the public comment hearings from 30 days to at least 60 and hold public hearings in at least five major American cities. NCRC also began a campaign to raise awareness of the merger’s problematic nature, producing numerous materials and arguments for members and partners to use when commenting to the Federal Reserve.

Through the organized efforts of NCRC and its members to urge the Federal Reserve to fulfill its obligation under the Dodd-Frank Act, the public comment hearings were extended and three public meetings were held in Washington, DC, Chicago, and San Francisco (The Wall Street Journal declared this a “rare move”). Robert Dickerson, Jr., Chair of NCRC’s board of directors, credits NCRC’s tenacity with making the hearings happen: “Capital One, obviously, is a financial giant whose influence and power probably outweigh the collective resources of the folks that opposed the merger. But NCRC forced the Fed to do something that they, before and since, have been reluctant to do, and that’s have public hearings to talk about a huge merger of financial giants.”

51

John Taylor, several NCRC board members, and many NCRC partners

Dickerson says, “our face-to-face meetings with those folks positioned

were present at these meetings to present the full case and refute

NCRC to have a role in helping the bank disseminate some of that $180

Capital One’s rebuttals. NCRC board member Bethany Sanchez says,

billion to make sure it got where it needed to get to make sure people

“the Federal Reserve took note of our work, they asked questions of

of color, folks in urban communities, people in low- and moderate-

board and staff even after the comment period had ended, so we knew

income tracts benefitted from their commitment.”

they were paying attention to what we had to say and our concerns and impact.” By the end of the hearings, those testifying against the

“I think the Capital One campaign has been a real high point for NCRC,”

merger greatly outnumbered those who supported it.

says Lee. “Capital One tried to rally groups it funded to support it but it didn’t work, and NCRC patiently explained its position to community

Despite the dedicated efforts to stop the acquisition, the Federal

organizations and won many of them over.”

Reserve Board unanimously voted to approve the acquisition in

52

February 2012. However, the work of NCRC to prevent the merger

“NCRC and its members organized and sent hundreds of comments

did result in a more thorough investigation than had originally been

to the regulators asking them to make sure there was a public benefit

planned. It also led to a CRA commitment of $180 billion from Capital

coming out of this merger,” says Jesse Van Tol, NCRC’s Chief of

One. Several members of NCRC’s board of directors were able to

Membership and Policy. “Slowly, but surely, we moved them towards

meet with Capital One’s leaders, including the CEO, to discuss the

greater recognition that there is a legal requirement for a forward-

commitment. “I remember our meeting with the CEO of Capital

looking statement of how a merger benefits communities. Since that

One, and how board member after board member chimed in with

time, we’ve seen conditional approvals requiring a CRA plan soar

information,” recalls NCRC board member Matthew Lee.

in number.”

53

NCRC Leads the Fight to Improve Housing Finance Reform

own Sen. Sherrod Br

In recent years, a major advocacy focus for NCRC has

requirement for the conventional market to serve traditionally

been the issue of housing finance reform in response to

underserved communities. In reaction to the proposal, NCRC launched

the recession. Since the beginning of the housing finance

a nationwide campaign to alert its members and other community

reform debate, NCRC has fought to bring access and

groups to the potential damage to the housing market, the economy,

affordability to the forefront of the discussion. Thanks to these

and our communities, and the obstacles to homeownership for

efforts, as housing finance legislation has evolved, access

millions of Americans.

for underserved communities gained prominence as an issue that, if not properly addressed, would be a deal-breaker for

In August of 2013, NCRC released A Guarantee for the Guarantee: Two

many legislators.

Proposals to Ensure that the Future Secondary Mortgage Market Serves All Creditworthy Borrowers, an influential white paper presenting

54

An initial attempt at housing finance reform in the Senate called

policy proposals to fill a critical gap in the existing legislation. This

for the elimination of government sponsored enterprises Fannie

white paper elevated affordable housing to a prominent role in the

Mae and Freddie Mac, along with their affordable housing goals,

debate and improved the quality of the conversation surrounding

without providing a replacement mechanism. The affordable housing

access and housing finance reform. Later legislation in 2014 partially

goals help to ensure that creditworthy borrowers in underserved

adopted components of NCRC’s proposal, but ultimately the

communities have access to conventional mortgage credit. They have

access provisions in the bill were still not strong enough to replace

been very important over the years in helping working Americans

the affordable housing goals, which would have been harmful

become and remain homeowners. Early legislation also had no

to working communities.

WHITE P APER

A Guarante Creditworthe for the Guarantee: Two Proposal y Borrowers s to Ensu

re that the

Future Seco

ndary Mortg

age Marke

t Serves All A Guarante e for the Gu that the Fu ture Secon arantee: Two Proposa dary ls to Creditwort Mortgage Market ServEnsure h y Borrowers es All

By Mitria Wilson, Josh Silv er, and El izabeth Kemp INTRODUCT ION

Lately, th ere is a flu rry of ac secondar tivity in y mortg Washing age mar proposal ton cent ket. The s by thin ered on activity k tanks an reformin the U.S. has cons d advoca g the House of cy groups 1 isted of a series Re presenta Presiden of papers , legisla tives and t Obama tive prop and U.S. Sena 2 as part of and Cong osals fro te, and the Adm ress’ focu m both ev inistratio en a poin s back to indicate n’s effor ted addr the econ s the ob t to turn es s by vi om ou y. the Amer s: the de taking sh The timin bate over ican publ ape right g and am the futu ic now. ount of re of Am attentio Table 1: er n ic a’s mortg A Grow ing Gov age mar ernmen ke t is t Footpr 4 int So far, ea t Serves All ch of the rtgage Marke reform Secondary Mo proposal t the Future s has focu s to Ensure tha sal se po primary d Pro o on two ntee: Tw aim ara(1 Gus: for the ) reducing scnte alee of A Guara the rrowe vers y Bogo P E R Creditinwohorthusing rnment involvemen PA E T I H fin t W ance an private ca d increa sing pital requ irements means fo as a r minim izing taxp risk; 3 an ayer d (2) ensu e ring that adequate cost of th an supply of clude the arantee mortgag y would in capital re st of the gu e arket entit mains av t. The co nge. To en ailable in to a secondary–m ra m t primary ss se se a thin marketthso using as tal cost the variable wi renters that Am an affordable ho n 1, e to canIncoOp would be wers and ericans nttio inue to re e cost of sessment thize orthy borro der tee andal of ho st of the as thethdr com t of creditw l costs un mar e ea gu ta ke eoan ar to wnershied, while m eir e th tir ing fix p. to reduce res the en met hous would be essed un that ensu d be able dr ul Yet, de ive ad wo nt at ce ies th in sp anl th ite t entit would be loans te al t Little, if ke of ea en r ar cr m m be e y ss m any, deta scnd an omiss usar ter nu the asse sion, , sedico Access iled atte n rv ng a grea affordabl nds from froed e Market areiose m thes ntion ha securitizi sulting fu consider e, conven nd, and th s been pa ssmenteby or. Any re tional m Magnet Fu creditwor nssere id to addr thateioas mains the regulat ortgage e Capital by thy borro th , es ed gl nd sin ar tifi cr Fu in en g edit to th t thed s id wers 5— e ne residents ne ed to prthe Hog. using Trus e full sp includin , and min ectrum ibuted to ovide g millen orities. Th of that this str ials, wor e Nationa omission king-cla di America’s l Comm ssFu renders . pe nd op un le the curre , ru ity Reinve ment) nt propos stment Co ral sing Assess als lackin alition be e Cost (Affordable Hou g. + Variabl lieves ed Cost (Guarantee) Fix = Total (Fee)

ing Sc taching a Slid Option 1: At sment es Housing Ass

NCRC seized this momentum to push for a stronger access mechanism and address other problems with the bill before it came to a vote. NCRC released new materials on the bill, laying out access concerns and recommendations for solutions. NCRC also spearheaded a letter, signed by over 300 community groups, to the Chair and Ranking Member of the Senate Banking Committee presenting their concerns. Through these efforts, NCRC managed to put the brakes on the bill, a

3

National Co mm

ivities siness act whose bu ties that are rket entity uri ondary-ma rtgage-backed sec es that do C 1: A sec t mortgag ing mo rke issu ma of nment consist primary the gover of pools of rk could still use le made up ma hest possib the Bench ds y the hig not meet y would pa of the assessed fun the t bu e, ing so. All e cost could be guarante do for t nte d; e cos ard guara guarante urance Fun the stand rtgage Ins Housing d that exceed either: (1) the Mo an et, d to al Magn distribute cess, Capit Market Ac or (2) the ds.

Trust Fun met the activities ntee business ard guara tity whose y the stand C 2: An en would pa rk criteria ma nch be the ed t. cos exceed activities the business ntee, but the guara tity whose the C 3: An en still pay for the proposal ties rk would ess d. Thus, benchma tity’s busin discounte en be an uld to nt needs. cost wo assessme t housing the me of un t nation’s exact cos t meets the activity tha

unity Reinv estment Co

alition

victory that came after months of advocacy by NCRC and its

www.ncrc.or g • 202-6 28-88

members to expose its many serious problems.

dable st of the Affor

ale to the Co

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NCRC remains vigilant on this issue and is committed to ensuring that housing finance reform works for all Americans. NCRC will keep up the fight to ensure homeownership does not become the domain of a privileged few.

www.ncrc.org

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stment Coalitio

munity Reinve

National Com

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• 202

NCRC’s Annual Conferences Coming Together to Create a Just Economy

O

ne of NCRC’s longstanding, successful, and much-anticipated

A major goal of the conference is to equip activists, professionals,

organizing and outreach events is its annual conference,

and policymakers with the knowledge and best practices needed

held in Washington, DC. Over the years, NCRC has brought

to accomplish meaningful economic reform on local and national

together community advocates, nonprofits, policymakers, government

levels. To this end, the conference offers a variety of workshops

officials, small business owners, and financial services professionals

covering topics like access to capital and banking services, housing,

for one of the nation’s largest community reinvestment gatherings.

community organizing and advocacy, workforce and community development, fair lending, and business development. “It’s a whole

“The passion and commitment to a just economy displayed by our

web of information you get when you go to these conferences,”

conference participants is truly inspiring,” says NCRC President and

comments NCRC board member Maryellen Lewis. “I have gradually

CEO John Taylor. “Our unifying purpose at the conference is to create vibrant, healthy neighborhoods and communities, and an economic system in which everyone has a fair shot to prosper. Together, we work to ensure that our economy and the policies and practices that surround it foster fairness and allow opportunity for all.”

56

“Our unifying purpose at the conference is to create vibrant, healthy neighborhoods and communities, and an economic system in which everyone has a fair shot to prosper.”

John Taylor, NCRC President and CEO brought more and more and more people to the conference, and they all love it. They’re transformed; they come away brimming. They’re full of ideas and energy.”

“What I like best are the workshops about hands-on, how to challenge bank and mergers, and hearing from local groups about what they’ve done, and what they intend to do,” says NCRC board member Matthew Lee.

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NCRC’S ANNUAL CONFERENCES

The Richard

conferences have also included special sessions

Cordray , Directo

r, Consu

mer Fin

ancial P

in which reinvestment advocates can learn about the

rotectio

n Burea

tools they need to expand their message, such as media and nken en. Al Fra

S

communications skills, grant writing and fundraising, organizing and advocacy. In 2010, as the economic downturn wreaked havoc on funding sources for nonprofits, the conference featured multi-day plenaries on “Surviving the Julián

Great Recession” to help

Castr o, Sec retary , U.S. De

partm e

58

nt of

Hous

ing an

d Urb an De

velop

ment

u

NCRC’S ANNUAL CONFERENCES

“I have gradually brought more and more and more people to the conference, and they all love it. They’re transformed; they come away brimming. They’re full of ideas and energy.”

Maryellen Lewis, Chair, Michigan Community Reinvestment Coalition; Member, NCRC Board of Directors

Sen. Hillary

Clinton

nonprofits survive by conducting strategic appeals to foundations,

Each year the conference features keynote speakers discussing recent

increasing fee-for-service opportunities, and procuring federal

accomplishments, projects, and issues relevant to NCRC’s mission.

economic recovery funds. NCRC offers a broad set of workshops on

In the past, speakers have included Federal Reserve Chairs Alan

subjects including access to credit, capital and banking services,

Greenspan and Ben Bernanke, FDIC Chairman Martin Gruenberg,

workforce and community development, organizing, policy advocacy,

Comptrollers of the Currency Eugene Ludwig and Thomas Curry,

housing, and business development. NCRC Regional Organizers

Director of the Consumer Financial Bureau Richard Cordray, Attorney

have held special trainings to give community advocates a better

General Janet Reno, and HUD Secretaries Henry Cisneros, Mel

understanding of the basics of CRA, outlining how community

Martinez, Shaun Donovan and Julián Castro. In addition, members of

advocates can use the law to increase financial opportunities and

Congress such as Maxine Waters, Elijah Cummings, Elizabeth Warren,

investments in their communities. The NCRC National Training

Barney Frank, Sherrod Brown, and others, have given addresses,

Academy often holds housing counseling and other trainings over the

as well as notable community advocates. Rev. Jesse Jackson, Rev.

course of the conference.

Dr. William Barber II, and Dr. Julianne Malveaux have been frequent guests, attending the conference on multiple occasions. In 2007,

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NCRC’S ANNUAL CONFERENCES

shortly after announcing her bid for the presidency, then-Senator Hillary Clinton spoke to conference participants about CRA, subprime lending, and foreclosures. Al Franken attended several times before entering the Senate, serving as a master of ceremonies for the NCRC Awards Dinner, and he has also addressed attendees since taking office. Through these speeches, guests see how the work they do in their communities every day leads to concrete results in the legislative and regulatory world. “You get the big dogs coming to Maria Contreras-Sweet, Administrator, U.S. Small Business Administration

your conference,” says NCRC board member Stella Adams. “That says something to your members about how important their membership is to the movement.”

In one particularly noteworthy keynote address in 2000, then-Federal Reserve Chair Alan Greenspan criticized the growing number of mortgage lenders preying on low-income borrowers through higher interest rates and fees. Greenspan’s concern about predatory lending, years before the housing crisis that precipitated the Great Recession, made news across the country. That he would make his remarks at the conference showed that NCRC was an early leader in the fight against lending tactics that threatened working families.

One of the most popular events of the conference is Hill Day, when members meet in person with their members of

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NCRC’S ANNUAL CONFERENCES

Congress and their staff. Hill Day meetings present members with the opportunity to directly express the urgency of access to affordable housing and financial services in their states. After the visits, members gather for the Congressional Luncheon, in which each state reports on the conversations and progress made during the visits. The energy and collective advocacy of Hill Day participants can be a strong factor in motivating members of Congress to act

“[Attendees have] really gotten active in their community, and done a better job than they had been doing before going to the conference, A better job at being vocal advocates for whatever they were involved in, whether it’s housing counseling, or pushing back against blight or conditions in the neighborhood.”

Robert Dickerson, Jr., Executive Director, Birmingham Business Resource Center; Chair, NCRC Board of Directors

on social and economic justice issues.

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NCRC’S ANNUAL CONFERENCES

As an opportunity for members to see how the work they do in their

All of the experiences at the conference contribute to the development

communities affects policy on the federal level, Hill Day has always

of skills and knowledge that attendees take back to their communities.

been an energizing event.

While the conference provides the physical space to organize for a just economy, its spirit continues beyond the four-day event. Reflecting

Advocacy at the conference doesn’t stop there though—the annual

on the work of his colleagues after their return from the conference,

conference has provided attendees the opportunity to make their

NCRC Board Chair Robert Dickerson, Jr., said, “They’ve come back and

voices heard on the streets of Washington. For example, as part of the

they’ve really gotten active in their community, and done a better job

campaign to halt Wal-Mart’s attempts to enter the banking world, in

than they had been doing before going to the conference, a better job

2006 NCRC led over 200 protesters to the steps of the FDIC and White House in a “Don’t Bank on Wal-Mart” rally, which brought widespread media coverage to the issue.

at being vocal advocates for whatever they were involved in, whether it’s housing counseling, or pushing back against blight or conditions in the neighborhood.” One attendee later ended up on the Birmingham City Council, Dickerson remembers, and, he says, “she always credits some of the things that she learned at the NCRC conference with helping her develop housing in the community.”

NCRC board member Bethany Sanchez concurs about the continuing influence of the conference, seeing its effects halfway across the country from DC. “In terms of the actual

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NCRC’S ANNUAL CONFERENCES

impact, it definitely has broadened the coalition here in Milwaukee of folks who pay attention to CRA, pay attention to fair banking, the coalition of folks who are willing to sign on when I write comments to regulators about our institutions here merging or acquiring others.

They work with me and give me input on those letters.” ate axine W Rep. M

And as Adams says, the show of force at the annual conference helps members during future meetings with their states’ Congressional

rs

members: “Your congressperson treats you differently at home when

Barb

er II

you come in his office after he’s seen who’s backing you up.”

most to help build wealth in traditionally underserved populations.

r. W i

and individuals, and members of the media who have done the

Rev .D

The NCRC awards honor individuals, nonprofits, government entities

lliam

The capstone of the conference is the NCRC National Awards Dinner.

Awardees over the years include Rev. Dr. William Barber II, President of the North Carolina NAACP; Congresswoman Maxine Waters; and many other leaders in the field of economic justice. The awards dinner

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NCRC’S ANNUAL CONFERENCES

includes speeches from the winners and others and serves as both a

While the annual conference brings together advocates from across

celebration of accomplishments and a moment to reenergize for the

the country, some problems specific to a locale require specialized

work still to come.

solutions. For that reason, on occasion NCRC has held state or regional conferences to focus on specific issues important to a state or city.

As a nationwide coalition, NCRC reflects the strength and success

Some of the conferences include the Western Regional Conference in

that arises when people from all backgrounds come together to work

1997, Davenport, Iowa in 2007, Birmingham, Alabama in 2011, Detroit,

for a just economy, and the annual conference is an embodiment of

Michigan in 2012, Cleveland, Ohio in 2014, and Wilmington, Delaware

that. Sanchez says, “One of the first things I hear, almost to a person,

and Baltimore, Maryland in 2015.

from the people that go for the first time is ‘wow, I didn’t expect such a diverse crowd,’ which always brings a smile to my face.”

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NCRC’S ANNUAL CONFERENCES

65

NCRC Today A

s NCRC enters its second quarter-century, it strives to fulfill its mission to provide everyone with a fair shot at the American Dream. Over the years, it has

expanded the services offered to members and communities across the country and continues to advocate for them at the highest levels of government. The organization has never wavered from its founding principles, and will continue its dedication to a more just economy for as long as necessary.

“The great thing about NCRC, that made us great, is that we don’t pick fights just because we think we can win, we fight because we need to fight,” said NCRC board member Gail Burks. “It’s not about you felt like you won; the question is did you bother to fight? To me that always has to be the question. And that’s always what has made NCRC strong.”

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“The great thing about NCRC is that we don’t pick fights just because we think we can win, we fight because we need to fight. It’s not about whether you felt like you won; the question is, did you bother to fight? And that’s always what has made NCRC strong.”

Gail Burks, President and CEO, Nevada Fair Housing Center; Member, NCRC Board of Directors In Memoriam

NCRC Board of Directors, 2015 NCRC Annual Conference

NCRC Staff, 2015 NCRC Annual Conference

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NCRC operates numerous services and programs that strive every day to push economic justice to the forefront of the national dialogue. Our work includes:

RESEARCH

MEMBERSHIP

NCRC is a qualified fair housing

from courses on the Community

organization and private

Reinvestment Act (CRA), fair

attorney general that works to

lending laws, Home Mortgage

NCRC provides a broad set of benefits and special services for its member organizations, including customized data analysis, trainings, technical assistance, legislative and regulatory updates,

seeking to understand and

NCRC’s National Training

address patterns of lending and

Academy offers substantive

investment in their communities.

state-of-the-art training and

NCRC’s research analyses provide powerful tools for

technical assistance both onsite and online via webinars.

NATIONAL NEIGHBORS uphold fair housing, fair lending and consumer protection laws across the U.S. through its National Neighbors program.

The extensive curriculum ranges

HOUSING COUNSELING NETWORK

Disclosure Act (HMDA), Truth in Lending Act (TILA), Real Estate Settlement Procedures Act (RESPA), Homeownership and

NCRC is a recognized HUD-

Equity Protection Act (HOEPA),

certified National Housing

the newest in mortgage loans,

Counseling Intermediary.

challenges to unfair lending

Through the NCRC Housing

policies, and effective coalition

One of NCRC’s most important

Counseling Network initiative,

building. NCRC seeks to “train

missions is to give its members

professional housing counselors

the trainers” and expand

a strong presence before

and mortgage advisors provide

the availability and reach

Congress. Through direct

comprehensive housing

of information on current

advocacy, testimony on Capitol

counseling to consumers directly

developments in community

Hill, and powerfully coordinated

from NCRC’s highly trained

reinvestment.

nationwide actions, the coalition

staff based in Washington, DC

works together to develop public

and through a network of HCN

policy solutions that promote

“partner” member organizations

community wealth-building.

located throughout the nation.

and more.

POLICY ADVOCACY

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advocates and organizations

NATIONAL TRAINING ACADEMY

NATIONAL NEIGHBORS SILVER National Neighbors Silver is a program to empower, organize and support economically vulnerable older adults.

Combining advocacy, organizing and direct services the campaign

GROWTH INITIATIVE

promotes access to quality

Through the GROWTH initiative,

banking services and adequate

NCRC and public, private and

housing for older adults. Working

nonprofit partners will transform

BUSINESS DEVELOPMENT

with the banking industry, the

vacant and abandoned properties,

aging network and housing

and by extension neighborhoods.

experts, National Neighbors

This initiative will return 4,000

NCRC operates a variety of business

Silver offers a platform for policy

units of single- family housing

development initiatives that

and program solutions to build

to productive use and create

support business ownership and

economic security and preserve

job training and placement

entrepreneurship among people of

wealth for aging Americans.

opportunities for local residents.

color and women. NCRC provides resources for entrepreneurial initiatives in low- and moderateincome communities, and works with policymakers and financial institutions to increase small business lending to women, minorities and low- and moderateincome communities. The centers provide business consultation

To learn more about NCRC’s latest work, and for information about becoming an NCRC member, visit ncrc.org or call 202-628-8866.

and training to women and minority entrepreneurs.

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“NCRC plays a vital role by engaging its members to ask questions and identify investment opportunities in their communities that could be turning their community around.”

Ted Wysocki, President and CEO, Institute of Cultural Affairs in the U.S.A.; Former Chair, NCRC Board of Directors

NCRC and its grassroots member organizations create opportunities for people to build wealth. We work with community leaders, policymakers and financial institutions to champion fairness in banking, housing and business development.

Our members include community reinvestment organizations, community development corporations, local and state government agencies, faith-based institutions, community organizing and civil rights groups, minority and women-owned business associations, and social service providers from across the nation.

727 15th Street, Suite 900 • Washington, DC 20005 • www.ncrc.org