[Congressional Record Volume 147, Number 28 (Tuesday, March 6, 2001)]
[Extensions of Remarks]
[Page E290]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  INTRODUCTION OF THE COMMUNITY REINVESTMENT MODERNIZATION ACT OF 2001

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                         HON. THOMAS M. BARRETT

                              of wisconsin

                    in the house of representatives

                         Tuesday, March 6, 2001

  Mr. BARRETT of Wisconsin. Mr. Speaker, I am pleased to reintroduce 
today, in partnership with my colleague, Rep. Luis Gutierrez, the 
Community Reinvestment Modernization Act of 2001, a very strong piece 
of legislation to modernize our fair lending laws to keep pace with the 
times. We first introduced this legislation during the last session of 
Congress in July of 2000.
  There are a lot of people who have worked very hard to bring us to 
this point today and I'd like to say a special 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.
  This bill is absolutely critical to helping creditworthy Americans 
gain access to credit and banking services. Since 1977, CRA has 
encouraged banks and thrifts to commit more than $1 trillion in private 
reinvestment dollars for mortgages, small business loans and community 
development loans for traditionally underserved communities. In the 
Milwaukee area alone, CRA has channeled over $200 million in lending to 
low- and moderate-income citizens and neighborhoods.
  The timing for CRA is crucial. CRA will become less effective if it 
is not updated to keep pace with the rapid changes that are occurring 
in the financial services marketplace as a result of the Gramm-Leach-
Bliley Financial modernization Act of 1999. The Community Reinvestment 
Modernization Act of 2001 will ensure that the hundreds of thousands of 
Americans, most often minorities and the working poor, will continue to 
have access to capital and credit.
  The bill is endorsed by the National Community Reinvestment 
Coalition, the U.S. Conference of Mayors, the National League of 
Cities, and the Association of Community Organizations for Reform NOW 
(ACORN).
  In my hometown of Milwaukee, it is supported by the Mayor of 
Milwaukee, the Fair Lending Coalition, Interfaith Conference of Greater 
Milwaukee, Hope Offered through Shared Ecumenical Action (HOSEA), the 
Local Initiatives Support Corporation (LISC), the Neighborhood Housing 
Services of Greater Milwaukee, Milwaukee Innercity Congregations Allied 
for Hope (MICAH), the Metropolitan Milwaukee Fair Housing Council, the 
National Association for the Advancement of Colored People (NAACP), 
Select Milwaukee and the Legacy Bank.
  So many people and institutions support this bill because CRA is not 
only the right thing to do, it is the profitable thing to do. According 
to a Federal Reserve Board report issued in July of 2000, 91% of home 
lending and 82% of small business lending under CRA is profitable. This 
is comparable to any other type of lending.
  The bill we are reintroducing today will update CRA to match the 
increased market powers the Financial Modernization Act creates. It 
will make banks accountable again by updating CRA to cover all loans 
and lenders. This not only includes mortgage companies, but also 
insurance companies, investment firms and other affiliates of banks 
that will increasingly be offering loans and basic banking products in 
the new financial world.
  In addition to extending CRA to all loans and lenders, the CRA 
Modernization Act of 2000 would: (1) Make insurance more available, 
affordable and accessible to minorities and low-income citizens; (2) 
improve data collection for small business and farm loans; (3) require 
a notice and public comment period for mergers between banks, insurance 
and investment companies; (4) require that HMDA data also include 
information on loan pricing and terms, including interest rates, 
discount points, origination fees, financing of lump sum insurance 
payment premiums, balloon payments, and prepayment penalties; (5) 
prohibit insurance companies that violate fair housing court consent 
decrees from affiliating with banks; and (6) penalize a financial 
institution and its affiliates through reduced CRA ratings if the 
institutions have engaged in predatory lending.
  CRA is paramount to continuing the progress this country has made 
towards eradicating discrimination in the financial services 
marketplace. And it is imperative that we modernize this important law 
now. The bottom line is that CRA is good for business. It not only 
levels the playing field to make sure that all creditworthy Americans 
have access to capital and credit, it makes good business sense.
  We hope you and all of our colleagues in the House will consider 
supporting the Community Reinvestment Modernization Act of 2001.

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