Key facts
- A proposed overhaul of the Community Reinvestment Act (CRA) could put about 85% of current community development activity at risk, according to the NCRC.
- The NCRC analysis examined 69 of the 100 largest U.S. banks by assets.
- These banks currently conduct about $102 billion a year in community development lending, investments, and grants within their CRA assessment areas.
- Under the proposed benchmark, this activity would total about $14.8 billion, a reduction of roughly 85%.
- The NCRC argues that banks could treat the proposed benchmark as a spending target, potentially reducing activity over time.
- Jesse Van Tol, NCRC's president and CEO, stated that the proposal could weaken investment, lending, and accountability in communities.
The National Community Reinvestment Coalition (NCRC) has released an analysis suggesting that proposed changes to the Community Reinvestment Act (CRA) could significantly reduce community development activity. The analysis, which focused on 69 of the 100 largest U.S. banks by assets, indicates that current community development lending, investments, and grants totaling approximately $102 billion annually could fall to $14.8 billion under a proposed benchmark.
The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corp. (FDIC) are currently seeking public comment on revisions to how large banks receive credit for community development activities conducted outside their designated assessment areas. One proposed option includes a benchmark of 0.625% of a bank's Tier 1 capital for community development loans, investments, and grants outside these areas.
While the agencies state this benchmark is not a minimum passing score, the NCRC argues it could become a de facto target for banks. The coalition's analysis shows that the median bank currently operates at levels nearly 11 times the proposed threshold for lending and nearly six times for investments and grants. The NCRC expressed alarm that the proposal could weaken investment, lending, and accountability in communities, with consequences felt for years to come.