On October 24, 2023, Federal banking regulatory bodies issued a final ruling on its process for revitalizing and strengthening the Community Reinvestment Act (CRA) of 1977. The ruling tightens regulations on banks, furthering the goal of challenging the racial home ownership gap by combating lending discrimination. Episcopal Community Services (ECS) submitted its first formal regulatory comment in 2022 during the rulemaking process to suggest additional ways to increase the effectiveness of the CRA.
The Community Reinvestment Act is a civil rights law intended to hold banking entities accountable to the ever-widening racial home ownership gap. President Carter signed the act into law in 1977 as a countermeasure to the widespread practice of redlining. Redlining is a discriminatory practice which relegates racial minorities to certain sections of municipalities in an effort to stifle economic and social mobility. Unfortunately, since the adoption of the CRA, the racial home ownership gap has only widened, prompting advocacy groups such as ECS to push regulatory agencies to revisit the law.
During the 2022 rulemaking process for the CRA, the ECS Inclusion and Advocacy team drafted and submitted its first formal regulatory comment since its inception in 2016. Racial equity is an ECS Lead advocacy issue and the CRA is a crucial step in healing the social and economic disparities between racial groups in the United States. ECS' comment focuses on ways to reinforce the CRA’s commitment to addressing lending discrimination in regard to race. This includes releasing more racially specific data, ensuring equitable treatment from banking institutions, and incentivizing activities that close the wealth gap.
The final ruling marks a decisive step in the right direction for the modernization of the CRA, but more work needs to be done to reverse the effects of redlining and lending discrimination. The ECS Inclusion and Advocacy team will continue to study this issue and advocate for racial equity in accordance with the ECS mission to challenge and reduce intergenerational poverty.