Trump appointee guts redlining

In the midst of the COVID-19 pandemic, a federal banking regulator issued new rules May 20 to weaken regulations against redlining without the support of the other two banking regulators: the Federal Deposit Insurance Corporation and the Federal Reserve.

The Office of the Comptroller of the Currency (OCC) action weakens the Community Reinvestment Act, a critical tool for promoting bank investment in low-income communities and communities of color. OCC Comptroller Joseph Otting, a Trump appointee, announced his departure from the agency two days after publishing the final rules.

Chicago Mayor Lori E. Lightfoot commented on the rule proposal in March and again explained her concern about the future of this civil rights law. “While Chicago is battling against an historic threat to our health and economy, the Trump administration is busy attempting to gut laws meant to drive resources to lower-income families – the very families that need our help the most. It is another example of this administration’s misplaced priorities. This great city, whose activists birthed the movement against redlining, will continue to fight so that banks meet the needs of all our neighborhoods, not just the wealthy ones.”

Interim Director of the Woodstock Institute Jean Pogge, a former banker, said Otting’s actions “create an unprecedented mish-mash of bank regulations at the least opportune time—a time when the financial sector seeks stability as it is called upon to fight COVID-19.”

The Community Reinvestment Act was passed in 1977 as part of a movement by Chicago activists such as Gale Cincotta and the Woodstock Institute to address discriminatory bank policies blocking non-white neighborhoods from bank loans, a practice known as “redlining.” Numerous organizations in Chicago united to oppose the OCC’s proposed action, including the Woodstock Institute, Housing Action Illinois, Chicago Community Loan Fund, IFF, The Resurrection Project, the Chicago Community Trust, and others. Roughly 15 percent of the comments critical of the proposal came from Illinois.

- Suzanne Hanney, from online sources