The Future of the Community Reinvestment Act

BELOW: Senator Sherrod Brown of Ohio speaking at the symposium.

On October 29, 2019, Penn IUR and the Wharton Public Policy Initiative (Wharton PPI) held a symposium entitled “The Future of the Community Reinvestment Act (CRA)” at the U.S. Capitol Visitor Center in Washington, D.C. The convening, attended by more than 100 Congressional staffers and policy analysts, was timely as the Office of the Comptroller of the Currency (OCC) had issued on January 9, 2020 an Advance Notice of Proposed Rulemaking (ANPR ) seeking comment on proposed changes to CRA rules. The symposium, which built on Penn IUR’s ongoing work on the topic (see “Current Research,” page 21, for information on the “Shared Prosperity in Urban America” project) in partnership with the Federal Reserve Bank of Philadelphia and the Federal Reserve Board featured two panel discussions: one presenting new research findings on the impact of the CRA and the other exploring proposed policy options intended to modernize this important legislation.

Senator Sherrod Brown of Ohio, who spoke at the symposium, expressed his hope that any changes to the CRA would reflect the spirit in which the law was originally adopted: as a tool to fight disinvestment in impoverished communities and as a key demand of the Civil Rights Movement.

The first panel discussion, moderated by Penn IUR Co-Director Susan Wachter and entitled “CRA Impact—Recent Findings,” focused on recent research on the long-term outcomes of the legislation. Panel participants included Paul Calem, Bank Policy Institute, formerly Federal Reserve Bank of Philadelphia; Laurie Goodman, Urban Institute; and Mark Willis, New York University. The second panel discussion, moderated by Kent Colton of the Colton Housing Group and entitled “Policy Alternatives,” focused on policy changes under consideration by federal officials. Panel participants included Gerron Levi, National Community Reinvestment Coalition; Pat McCoy, Boston College; Buzz Roberts, National Association of Affordable Housing Lenders; Dafina Stewart, Bank Policy Institute; and Lawrence J. White, New York University. While the symposium participants reflected a range of viewpoints, there was broad agreement that the rule change, which calls for a simple ratio of dollar amounts expended on qualifying activities relative to deposits, could undermine the law’s mission. Participants noted such a metric could fail to identify and meet local communities’ needs. The December 2019 Penn IUR Brief “Modernizing the CRA (While Preserving Its Spirit),”  by Susan Wachter, summarizes the issues covered at this event.