[Congressional Record Volume 166, Number 118 (Friday, June 26, 2020)]
[House]
[Pages H2571-H2580]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
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PROVIDING FOR CONGRESSIONAL DISAPPROVAL OF RULE SUBMITTED BY OFFICE OF
THE COMPTROLLER OF THE CURRENCY RELATING TO ``COMMUNITY REINVESTMENT
ACT REGULATIONS''
Ms. WATERS. Madam Speaker, pursuant to House Resolution 1017, I call
up the joint resolution (H.J. Res. 90) providing for congressional
disapproval under chapter 8 of title 5, United States Code, of the rule
submitted by the Office of the Comptroller of the Currency relating to
``Community Reinvestment Act Regulations'', and ask for its immediate
consideration in the House.
The Clerk read the title of the joint resolution.
The SPEAKER pro tempore. Pursuant to House Resolution 1017, the joint
resolution is considered read.
The text of the joint resolution is as follows:
H.J. Res. 90
Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled, That Congress
disapproves the rule submitted by the Office of the
Comptroller of the Currency relating to ``Community
Reinvestment Act Regulations'' (85 Fed. Reg. 34734; published
June 5, 2020), and such rule shall have no force or effect.
The SPEAKER pro tempore. The joint resolution shall be debatable for
1 hour equally divided and controlled by the chair and ranking minority
member of the Committee on Financial Services.
The gentlewoman from California (Ms. Waters) and the gentleman from
North Carolina (Mr. McHenry) each will control 30 minutes.
The Chair recognizes the gentlewoman from California.
General Leave
Ms. WATERS. Madam Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks on H.J. Res. 90 and to insert extraneous material thereon.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from California?
There was no objection.
Ms. WATERS. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I rise in support of H.J. Res. 90, a Congressional
Review Act resolution of disapproval to nullify the Office of the
Comptroller of the Currency's rule undermining the Community
Reinvestment Act.
I introduced this resolution with our Consumer Protection and
Financial Institutions Subcommittee chair, Representative Meeks, and I
am proud we are joined by 70 other Members who have cosponsored the
resolution.
The Community Reinvestment Act is a civil rights act. It is a law
enacted in 1977 to prevent the discriminatory practice of redlining, in
which banks discriminate against prospective customers in nearby
neighborhoods, often based on their racial or ethnic background. The
law requires banks to invest and lend responsibly in low- and moderate-
income communities where they are chartered.
Unfortunately, implementation of the Community Reinvestment Act has
not been robust. Today, 98 percent of the banks routinely pass their
Community Reinvestment Act exams. However, research has shown that more
than 60 metro areas across the country are now experiencing modern-day
redlining today. These findings clearly demonstrate the need to
strengthen the implementation of the law. Unfortunately, the OCC's rule
would do the opposite.
Despite the warnings of a wide range of stakeholders, former
Comptroller Otting rushed to finalize this rule in his final days on
the job. So, without the support--without the support--of the Federal
Reserve or the Federal Deposit Insurance Corporation, the other banking
regulators were responsible for enforcing the law.
Mr. Otting appears to have been determined to undermine the Community
Reinvestment Act ever since the law complicated his efforts to quickly
obtain regulatory approval for OneWest Bank, a bank that he ran with
Treasury Secretary Mnuchin, to merge with another bank in 2015.
I am deeply concerned that the OCC's final rule will harm low-income
and minority communities that are disproportionately suffering during
this crisis, effectively turning the Community Reinvestment Act into
the community disinvestment act.
If this resolution is not adopted, we will have different rules for
different banks, leading to regulatory arbitrage and a race to the
bottom of weaker standards that will only hurt the people the law is
intended to help.
Notably, the OCC rule was adopted with insufficient and incomplete
data, and it incentivizes large deals at the expense of smaller and
more continuous financial transactions that truly benefit LMI
communities.
For example, the OCC final rule allows CRA credit to be given for
activities in LMI-qualified opportunity zones, but the rule does not
ensure that these activities promote community development that
includes affordable housing or small business economic development.
This can lead to the unacceptable result of banks receiving CRA funding
for building luxury housing in opportunity zones, providing no direct
benefit to LMI communities.
Additionally, the OCC concedes it does not have all the data it needs
to properly implement its new CRA framework, with the rules stating
that the OCC will need to issue yet another notice of proposed
rulemaking in the future to help set specific benchmarks, thresholds,
and minimums. It doesn't speak highly of a rule when the office says it
is half baked.
A wide range of stakeholders have criticized OCC's efforts. For
example, a group of civil rights and consumer groups issued a statement
noting: ``The new OCC rules stick with an overly simplistic metrics
system that creates a loophole for banks to exploit, allowing them to
get a passing CRA rating by making investments in communities where
they can reap the largest rewards, while leaving too many credit needs
unmet for underserved consumers and neighbors.''
During these difficult times, communities across the country have
taken to the streets to demand justice and to tell their elected
officials that they can no longer ignore the needs of communities of
color. In a letter supporting this resolution from various
organizations led by the Leadership Conference on Civil and Human
Rights and National Community Reinvestment Coalition, they wrote: ``In
the weeks since the OCC finalized its rule, our Nation has been facing
a long overdue reckoning with our troubled legacy of racial and ethnic
discrimination. . . . Now is certainly not the time to weaken the most
important civil rights laws we have at our disposal to correct those
disparities.''
Congress must block any effort by the Trump administration to weaken
our civil rights laws and send a strong message to Federal regulators
that they should be doing all they can during this pandemic to help,
not hurt, low- and moderate-income communities, and especially
communities of color.
By passing this resolution, Congress will block the OCC's harmful
rule so that, once the pandemic passes, banking regulators can renew
efforts to collaborate, modernize, and strengthen the Community
Reinvestment Act with a new joint rulemaking that truly benefits the
community the law was intended to help.
Madam Speaker, I urge my colleagues in the House to vote ``yes'' on
H.J. Res. 90.
Madam Speaker, I reserve the balance of my time.
Mr. McHENRY. Madam Speaker, I yield myself such time as I may
consume, and I rise in opposition to the resolution.
Madam Speaker, as I said, I rise in opposition to this resolution.
First, before I get into the contents of my discussion here, I want to
thank Chairwoman Waters for her steadfast and long-time leadership in
supporting minority, rural, low- and middle-income communities, LMI
communities. Her service in the California Assembly and Senate and
Congress has been commensurate with that work and that focus.
Committee Republicans share the chairwoman's goal of strengthening
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these communities. For example, we know that community development
financial institutions and minority depository institutions play
critical roles in getting necessary funds to the smallest of small
businesses in these communities.
Committee Republicans support the efforts of the Paycheck Protection
Program to target small lenders as well as small businesses in
communities across America.
Committee Republicans believe the reforms made in the underlying
final rule promulgated by the Office of the Comptroller of the Currency
will continue to support minority, rural, and LMI communities into the
21st century.
Madam Speaker, the Community Reinvestment Act was enacted in 1977,
nearly 43 years ago. Its purpose was to ensure depository institutions
like banks and savings associations help meet the needs of their local
communities. The law tasks the OCC, as well as the other bank
regulators, with issuing rules to carry out that purpose. However, the
last time the CRA regulations were meaningfully updated was in 1995.
I think we can all agree that a lot has changed in the past 25 years,
including how banks can best serve their communities. Much of this
change has been driven by technology and innovation.
In 1995, it was cutting edge when you could call your bank and get
your balance and the last couple of checks that cleared your account.
Calling up and not having to talk with somebody and a computer tell you
the answer, that was cutting edge. And at that time, only 24 percent of
Americans had accessed the internet.
Since that time, we have witnessed a massive shift to online and
mobile delivery of banking services, and that is for good in many, many
ways. This virus has really enhanced that trend just in the last few
months. This means that where banks get their deposits doesn't
necessarily match up with where their branches are physically located.
Second, the number of bank branches has steadily declined since the
financial crisis, but the CRA regulations continue to place a very
heavy emphasis on banks' physical footprints rather than where they
truly serve.
At the same time, CRA exams have gotten more complex and less
transparent. Banks can only guess which of their community investments
will receive credit, because the exams are quite highly subjective. The
written evaluations can be thousands of pages long, and yet the
regulators and the public have no clear data to help understand where
all the CRA money has gone.
But there are, sadly, a few things that have not changed in the last
25 years--sadly--including socioeconomic conditions in the poorest
communities, economic opportunity, and the persistent lack of capital
in those communities. The CRA is intended to help address those issues,
and that is why it is a vital and important law and, properly
structured, can deliver in a better way.
But, clearly, we know the status quo is not working. It is not
working for the communities that we care desperately about giving
opportunity to, economic opportunity to, and that is really what this
is driven towards with this law.
Modernizing this regulatory framework is long overdue. Here are a few
aspects of the rule that I believe represent major improvements over
the old regulations.
First, the rule provides for a public list of activities that will
count for CRA credit so the community can understand, the banks can
understand, and we, as elected officials who have oversight of this
program, we can understand, too. And they will have that public list on
what counts for CRA credit.
This list will eliminate regulatory ambiguity and provide certainty
over the types of investments that will lead to a good evaluation. With
more certainly, banks will naturally make more investments. That is how
capitalism works. This change alone is likely to increase community
reinvestment across the board.
Second, the rule provides a better model for where the activity can
count. Banks will be incentivized to invest where they take deposits
instead of only around their branches. Let me explain.
Previously, a bank was only evaluated on its lending and investment
in an area around its physical footprint, but banking today is very
different than it was a generation ago when this regulation was
written. Banking today, with the help of new technology and innovation
has changed substantially. So, if an online bank chooses a headquarters
in one State--let me give you an example: Utah.
Utah has a lot of online banks and they domicile in Salt Lake City,
so that is where the community giving is around Salt Lake City, even if
they take most of their deposits from Chairwoman Waters' district or my
district. So, if you have that headquarters for an online bank, it
should not prevent them from making investments in other States or
localities that desperately need capital.
Under the final rule, banks will get credit for investing in so-
called banking deserts. This has been a priority of mine for the last
decade, to help those who are in communities where they can't get ready
access. We know food deserts in urban areas, and if you can't get
access to fresh food, you can't have a healthy diet.
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That is a huge issue. It is a huge issue in rural areas, it is a huge
issue in urban areas.
So we have banking deserts now, and this rule prioritizes those
banking deserts that don't have a branch or don't have many branches.
And those underserved places under this rule are distressed areas,
economically distressed areas, Tribal lands, folks that have been hit
by natural disasters, regardless of where they get deposits or if they
get deposits from those areas. I think there are some laudable changes.
Now communities without bank branches that were essentially invisible
under the current framework will be able to receive CRA investment.
This is a huge improvement.
Finally, the rule introduces objective metrics and transparent
evaluations. I think that is a really good thing for regulation.
Instead of a highly subjective exam and a 1,000-page evaluation,
examiners will be able to deliver more consistent, useful, and timely
CRA evaluations; ``timely'' meaning more frequent and more readily
available.
Clearer metrics and better reporting will enable banks, regulators,
and the public to have a better understanding of the CRA activities of
individual banks and of cross-sections of the industry. Consumers will
be able to see that and understand the type of institution they are
banking with as well.
I would also note that this final rule is a culmination of a
multiyear process. It reflects more than a decade of dialogue about how
to make the CRA work better, it builds on recommendations that Federal
banking agencies submitted to Congress in 2017 and recommendations
released by the Treasury Department in April of 2018 and more than 75
hard comments submitted during the rulemaking process that updated and
changed and made better the regulations that the administration put
forward.
Republicans and Democrats agree the Community Reinvestment Act is
extremely important, it is an important law. And because it is
important, the regulations need to keep pace with how Americans bank
today.
I believe this rule is a huge improvement over the status quo.
Madam Speaker, I urge my colleagues to vote against this resolution
and support the underlying rule.
Madam Speaker, I reserve the balance of my time.
Ms. WATERS. Madam Speaker, I yield 3 minutes to the gentleman from
New York (Mr. Meeks), who is the chairman of the Subcommittee on
Consumer Protection and Financial Institutions and the coauthor of this
bill.
Mr. MEEKS. Madam Speaker, I rise in support of H.J. Res. 90, and I am
proud to have joined Chairwoman Waters in introducing it.
This resolution provides for congressional disapproval of the rule
submitted by the Office of the Comptroller of the Currency relating to
the Community Reinvestment Act.
The Community Reinvestment Act was enacted into law, as indicated, in
1977 as a direct response to the long, painful legacy of structural
discrimination, financial exclusion, redlining, and
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economic suppression of racial minorities in America, a legacy of
prejudice and economic exclusion that we are seeing all-too-clearly
still echoes to this day, which is why many of the individuals you see
in the streets today want to correct this structural problem that we
have in our Nation.
At its core, the Community Reinvestment Act is a civil rights bill.
It was the fourth in a series of banking bills passed to address
systemic discrimination in banking, including the Fair Housing Act of
1968, the Equal Credit Opportunity Act of 1974, and the Home Mortgage
Disclosure Act of 1975.
These bills built on the findings of the 1961 report from the U.S.
Commission on Civil Rights, and community-led civil action in Chicago
to hold banks accountable for rampant discrimination in lending in
Black and Hispanic communities.
Any efforts at reforms and modernization must remain true to this
legacy, particularly given the overwhelming evidence of continued
discrimination in banking and access to finance.
We must make sure that when we look at the CRA, the CRA is creating
an opportunity for minority businesses to thrive and strive and
investing further in its communities; that affordable housing is
something that is there, not something where we are investing and
driving people out so they can't have the benefits in the community. It
must be relevant to the community and keeping the people in the
community so that they can see a better life.
Under Comptroller Otting's leadership, the OCC's work on CRA
modernization has systematically failed to remain true to the law's
civil rights roots. In fact, the very way in which the rule was
finalized and published by the OCC was symptomatic of the agency's
failed approach from the start. It was rushed, unfinished, unsupported
by data, and not done in coordination with the other prudential
regulators.
And to cap it all off, Comptroller Otting abandoned his post within
the very same week of publishing this rule, in the middle of a
pandemic, economic crisis, and a looming banking crisis, leaving
everyone else to hold the bag.
The SPEAKER pro tempore. The time of the gentleman has expired.
Ms. WATERS. Madam Speaker, I yield an additional 30 seconds to the
gentleman.
Mr. MEEKS. Madam Speaker, the fact is, there is room to modernize CRA
and to update it to the realities of modern-day banking. The Fed and
community advocacy groups have put forward some thoughtful ideas on
just how to do that.
Let us pass this bill, let us stop this ill-fated rule that the OCC
put out, and let us do some real CRA to help people in these
communities who have been deprived for far too long.
Mr. McHENRY. Madam Speaker, I yield 3 minutes to the gentleman from
Colorado (Mr. Tipton), a great member from the Financial Services
Committee who also is the vice chair of the Western Caucus.
Mr. TIPTON. Madam Speaker, I thank the gentleman for yielding.
I rise in opposition to the resolution on the floor today.
We agree that the Community Reinvestment Act is an important historic
piece of legislation; however, my friends across the aisle have
mischaracterized the OCC's rule and the modernization of the CRA.
First, the OCC's rulemaking process has been thorough, inclusive, and
thoughtful. CRA regulations haven't been meaningfully updated since
1995, making this a much-needed effort to ensure that regulations match
the modern state of the banking industry.
The OCC's processes included input from the Federal Reserve, the
FDIC, the Federal Financial Institutions Examination Council, and the
Treasury Department.
The OCC has also provided ample opportunities for regulated banks and
consumer groups to weigh in.
What is more, 94 percent of the participants in the OCC's advance
notice of proposed rulemaking agreed that the current CRA rules lack
objectivity, transparency, and fairness. These are the central themes
to the OCC's modernization effort.
Second, this update to the CRA is needed now more than ever. One
large bank's CEO recently noted that due to COVID-19, the bank has seen
somewhere between a 17 and 35 percent increase in online banking
activity that normally would have been conducted in the branch.
Americans are turning to online banking resources now more than ever.
The OCC's rule takes steps to be able to ensure that CRA dollars go
into low-to-moderate income communities where banks draw their
deposits, not only where they have bank branches. This change is
forward-looking and should mark significant new opportunities to be
able to invest in underserved communities.
Third, the OCC regularly and meaningfully engaged with critics in the
rulemaking process. The OCC met with community, consumer, and academic
groups to listen to their concerns about the proposal.
These meetings resulted in real changes to the OCC's final rule,
including a raised exemption threshold for community banks, changes to
the treatment of mortgage origination and sale on the secondary market
for purposes of the CRA, and raising the bar for a passing grade in CRA
examinations.
This rule creates greater accountability between banks and the
communities they invest in under the CRA. It adds transparency in what
activity counts towards CRA credit, creates fairer and more timely
examinations, and allows CRA performances to be measured assessment
over assessment and against other banks. It also allows banks to reach
new constituencies with their CRA dollars, most notably disabled,
Tribal, rural, and farm populations.
By increasing regulatory certainty and reducing subjectivity, the OCC
CRA modernization rule can equal greater lending and investment in
underserved communities.
Madam Speaker, I urge my colleagues to vote ``no'' on the measure.
Ms. WATERS. Madam Speaker, I yield 2 minutes to the gentleman from
Texas (Mr. Green), the chairman of the Subcommittee on Oversight and
Investigations.
Mr. GREEN of Texas. Madam Speaker, it is an honor to serve in the
Congress of the United States of America under Chairwoman Waters'
leadership.
Madam Speaker, Ms. Waters and I both know that the CRA was not born
to create luxury homes in opportunity zones. The CRA was not birthed to
provide opportunities in what are being called banking deserts that may
not be LMI communities.
The CRA was born to correct the harm that the government had done in
the 1930s.
At that time, the government, by and through the FHA, decided that it
would craft maps, and these maps had red lines on them. These red lines
became communities that were undesirable, but more appropriately, they
were deemed unsafe, and as a result, lending institutions would not
lend in these redlined areas.
The CRA was born to end the discrimination, the redlining, but this
bill takes a step back to the 1930s.
This bill will not undo the harm that was done; it will increase the
harm. I cannot support it.
The CRA was created to help LMI, low-to-moderate income, communities
have banking privileges that they were denied under the law.
This bill doesn't help us with the LMIs. It is going to give those
big guys an opportunity to acquire these funds. I stand against it.
Madam Speaker, I support the chair of the committee and I stand for
justice for the LMI communities.
Mr. McHENRY. Madam Speaker, I yield 3 minutes to the gentleman from
Michigan (Mr. Huizenga), my friend and the ranking member of the
Subcommittee on Investor Protection, Entrepreneurship, and Capital
Markets.
Mr. HUIZENGA. Madam Speaker, I rise today in opposition to H.J. Res.
90, which is an effort to overturn a long-overdue regulatory update of
the Community Reinvestment Act.
Frankly, it is ludicrous to compare this modernization effort to
bringing us back to 1930s banking policy. I don't understand how my
colleagues on the other side can possibly equate that.
So we all agree the fundamental purpose of the Community Reinvestment
Act is to combat unacceptable, discriminatory redlining, and demand
that banks meet the credit needs of
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their communities. There is no disagreement on that. My friend from New
York laid out that history very, very well. It is the reason why we
support the CRA and modernizing it.
However, the regulations promulgated to implement the CRA haven't
been meaningfully updated since 1995. Now, earlier we were talking
about credit reporting, and the chair cited the fact that we had not
addressed this in 17 years, as to why we needed to pass the bill that
was on the floor. Well, we haven't addressed the CRA in any meaningful
way for 25 years. We have 8 years on that on this particular issue.
So in May of this year, the Office of the Comptroller of the Currency
issued a final rule that modernizes the Community Reinvestment Act
regulations for the 21st century.
The final rule provides clarity to banks on what activities count for
a Community Reinvestment Credit, updated the geographic definitions of
a bank's community, as well as accounts for the technological
transformation of banking services that we have seen. This will ensure
that banks' reinvestment will be in those communities that need it
most.
The final rule establishes new performance standards and metrics that
will allow OCC bank examiners to measure performance objectively and
produce more consistent, useful, and timely Community Reinvestment Act
evaluations to provide more clarity to banks.
Now, I understand that some of my colleagues want to have this
``let's move the target to my pet project'' kind of a way of evaluating
where a bank is going, but that is not what it is intended to do.
Lastly, this modernization introduces objective reporting measures
that will allow comparison over time and between banks, which has never
been possible in the history of the CRA. What is a good project in one
neighborhood should be viewed as a good project in an adjacent
neighborhood, and that isn't the case today.
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As we work to ensure a strong economic recovery for all Americans--
all Americans--it is critical that we encourage financial institutions
to continue to provide services to those most in need.
I have the poorest county in the State of Michigan. I have urban and
suburban areas. These are issues that affect all of America.
The OCC's rule will play an important role in this recovery effort by
encouraging more capital, investment, and lending services in the
communities hardest hit by COVID-19.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. McHENRY. Madam Speaker, I yield the gentleman from Michigan an
additional 1 minute.
Mr. HUIZENGA. Madam Speaker, I appreciate the ranking member doing
that. Let me just wrap up.
By using the Congressional Review Act to overturn this critical final
rule, my colleagues on the other side of the aisle will only delay
progress and harm the very communities that I know they want to
protect. Those are the same communities that I serve as well.
I urge all of my colleagues to vote against this partisan attempt to
overturn much-needed reform and modernization of the Community
Reinvestment Act, and I am hopeful that we are going to be able to come
together and work on true, meaningful, actual reform in the long run.
Ms. WATERS. Madam Speaker, I yield 2 minutes to the gentleman from
Washington (Mr. Heck), a senior member of the Financial Services
Committee.
Mr. HECK. Madam Speaker, I thank the chairwoman for introducing this
important measure, of which I am a proud cosponsor.
This resolution is especially timely as we reckon with the legacy of
discrimination in our country. In that process, we must consider how
housing policy has contributed to systemic inequality.
For decades in this country, we allowed a Federal agency to
legitimize racial discrimination by creating those color-coded maps
indicating where investments would be profitable, ``greenlined,'' or
where it would not be, ``redlined.''
We built institutional obstacles for Black families trying to
purchase a home, and that resulted in devastating, intergenerational
financial disadvantages.
Redlining prevented access to the single most important wealth-
building tool an American has access to, that is, owning a home. The
result? Black families have a median net worth of $17,000, compared to
$171,000 for White families. In fact, homeownership by Black families
is 44 percent, and by White families, 74 percent.
We have a responsibility to do everything we can to correct this.
After all, we created it.
Yet, in the middle of a pandemic that has made racial disparities all
the more pronounced, the OCC rushed out a final rule that undermined
the legislation that made redlining illegal, and they even did it
without the support of the Federal Reserve or FDIC.
The OCC's vague definitions and overly simplistic metrics do not do
justice to what a crucial role homeownership and housing policy have
played in racial inequality.
Their approach takes us backward. If you don't want to go backward,
vote ``yes'' on this measure. If you believe homeownership should be
available to all Americans, regardless of skin color, vote ``yes'' on
this matter. If you oppose redlining, vote ``yes'' on this measure. If
you want to stand for racial justice, vote ``yes'' on this measure.
Mr. McHENRY. Madam Speaker, I would just note for the Record that the
FDIC approved just this week this rule, the CRA, so that is, in fact,
they actually support this underlying rule.
Madam Speaker, I yield 4 minutes to the gentleman from Little Rock,
Arkansas (Mr. Hill), my colleague and friend, the ranking member of the
National Security, International Development and Monetary Policy
Subcommittee.
Mr. HILL of Arkansas. Madam Speaker, I thank the ranking member for
the time.
Madam Speaker, I rise today in opposition to H.J. Res. 90, but I rise
in support of the Community Reinvestment Act. And I rise in support of
the goal of CRA, for a fair and more equitable treatment of financial
investment, particularly in low- and moderate-income areas of our
communities.
This resolution overturns the updated Community Reinvestment Act
regulation before it has even had a chance to take effect.
Speaking purely from a procedural standpoint, this resolution, in my
view, Madam Speaker, is not necessary. We could be spending time on the
House floor today in a much more productive way to advance the economy.
The Office of the Comptroller of the Currency has gone through a
rigorous Administrative Procedure Act process. I think our constituents
should know they have conducted outreach since 2017, 3 years, and have
taken all that into consideration, the Federal Reserve data, Treasury
recommendations, and have conducted both advanced notice for proposed
rulemaking and a notice of proposed rulemaking, and received 7,500
comments.
The final rule ended up incorporating much of this serious and
constructive criticism received from all stakeholders, notably, our
community groups.
Banks have been complying with the Community Reinvestment Act for
years. This is not a new rule, Madam Speaker. This rule is simply being
updated to reflect the current economic and banking conditions in our
country. The last time that was updated was 1995.
Working for a publicly traded bank in Arkansas then, I was involved
in the training and the implementation at that bank for those 1995
revisions.
Madam Speaker, as one of the few Members of Congress who has actually
gone through multiple CRA examinations, I can assure my colleagues that
this rule could benefit from a thoughtful update.
The final rule clarifies what counts for CRA credit. It updates what
bank activity counts for CRA credit. It evaluates the CRA performance
of our financial institutions in a much more fair, open manner. It
makes CRA reporting more transparent and faster. It reflects the
fintech community of digital banking in our country today. And it
enhances CRA for rural areas and Tribal areas in our country.
In short, the bank branch issue that the ranking member mentioned is
serious. We have had a shrinking number
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of banks since the original rule was proposed in 1977, and the CRA rule
was connected to those bank branches. That is another reason for
modernizing the rule.
Since we created this bank branch closure system by our economy
contracting the number of banks, due to regulation and the like, it is
a double whammy, so let's make sure that our banks can get credit for
doing a good job on accessing of all of our communities, particularly
our minority, low-to-moderate income, and rural areas served by those
institutions.
Let's fix this problem by having the certainty that we have an
effective CRA rule, that it is implemented properly, and that we can
all see our constituencies benefited by that.
Let's let the Comptroller of the Currency do their job. They are the
banking experts. They are the ones who have been managing this work.
Congress should not be undermining it.
Madam Speaker, I thank the chairman for the time, and I urge my
colleagues to vote ``no'' on the resolution but support the work of the
Community Reinvestment Act.
Ms. WATERS. Madam Speaker, I yield 2 minutes to the gentlewoman from
Massachusetts (Ms. Pressley), a member of the Financial Services
Committee.
Ms. PRESSLEY. Madam Speaker, I rise today in support of this critical
resolution reversing a rule tainted by conflicts of interest and
callous disregard for the communities most affected.
As hundreds of thousands take to the streets, as the cries for a
reckoning with this Nation's past and present grow louder, this
administration believes that the future is further deregulation.
Today, we reject the administration's position that it is banks that
are deserving of our time and sympathy as further relief funding is
denied to millions of struggling families.
There is no separating the history of banking from the history of
racism in this country. Wall Street, our Nation's financial capital, is
named after a structure erected by enslaved people and then served as a
site where they were bought and sold.
Today, we have predatory lenders set up in Black communities, where
systems of oppression ensure a steady stream of customers, communities
that banks have decided are simply not worth their time or their
business.
The Community Reinvestment Act reflects, and is a direct response to
this history, and aims to reverse course.
I urge all of my colleagues to acknowledge the decades of divestment
from our communities and to support this crucial civil rights
legislation.
Mr. McHENRY. Madam Speaker, I yield 4 minutes to the gentleman from
Janesville, Wisconsin (Mr. Steil).
Mr. STEIL. Madam Speaker, I rise today in opposition to the
resolution of disapproval.
The Community Reinvestment Act is an important law that encourages
investments in places like Racine, Kenosha, and Janesville, and
communities in need across this country. But the rulings governing the
CRA haven't been updated since 1995.
In the last 25 years, the banking industry has undergone significant
changes. Small and medium-sized banks have consolidated and closed.
Branches have disappeared from some rural and low-income areas.
Technology has drastically affected the way millions of Americans are
conducting their banking.
The CRA needs to be updated to fit the banking system we have today
and to meet the needs of the communities in 2020. That is exactly what
the OCC is trying to do with the new rule.
The new CRA rule provides financial institutions with greater clarity
about which activities count for CRA credit and where that activity
needs to take place. It also takes into account the reality that many
banking activities are conducted online by giving banks that are
largely digital credit for investing in areas where they take deposits.
By implementing consistent, objective metrics, the new CRA rule also
makes it easier for examiners to measure the performance and to compare
institutions. This resolution of disapproval would block all that
progress, to the detriment of communities in need.
I urge my colleagues to vote ``no'' on this resolution.
Ms. WATERS. Madam Speaker, I yield 2 minutes to the gentlewoman from
New York (Ms. Ocasio-Cortez), who is also a member of the Financial
Services Committee.
Ms. OCASIO-CORTEZ. Madam Speaker, I thank Chairwoman Waters for her
continued leadership on the Community Reinvestment Act.
Over the last several weeks, our Nation has been gripped by the
uprisings against anti-Black racism and systemic racial injustice
across the United States. But there is a difference between saying that
we believe in the inherent dignity, equality, and value of our Black
brothers and sisters and actually committing to it. The Community
Reinvestment Act is one such commitment.
Our Nation has an unconscionable racial wealth gap that is directly
rooted in the racist financial practice of redlining, whereby Black
communities had red lines drawn around them on a map and were
systematically denied banking, housing, and economic opportunities.
As a result, generations of White communities were given a head start
at homeownership, which was the foundation of generational wealth,
while Black communities were denied.
This fuels a runaway generational wealth gap that haunts the United
States today. It is a practice that continues, with over 60 metro
areas, in this very moment, having banks that deny Black applicants at
significantly higher rates than they do White applicants.
Now, the CRA is an antiracist, antipoverty policy that seeks to
remedy some of the damage done.
Yet, while this administration and the Republican Party paid lip
service to Black and Brown communities with toothless policing
legislation, behind everyone's back, the OCC made moves to gut rules
around the CRA and advance the continued economic oppression of Black
people in the United States. In fact, these rule changes advance
gentrification and value luxury housing over investment in Black lives.
Well, to that move, we have four words: Not on our watch. That is
because, in this House, in the 116th House, under the leadership of
Chairwoman Waters, we will value Black lives.
Mr. McHENRY. Madam Speaker, I reserve the balance of my time.
Ms. WATERS. Madam Speaker, I yield 2 minutes to the gentleman from
Illinois (Mr. Garcia), a member of the Financial Services Committee.
{time} 1700
Mr. GARCIA of Illinois. Madam Speaker, I thank Chairwoman Waters for
this opportunity.
I rise in support of this resolution and join my colleagues in
opposition to the Trump administration's new rule that weakens
implementation of the Community Reinvestment Act.
It is an outrage that the Trump administration's OCC issued this rule
that guts a historic law in the midst of an unprecedented pandemic.
To add insult to injury, former Chairman Otting resigned his post
immediately after issuing the rule so that he will avoid cleaning up
the fallout from this mess. It is up to Congress to clean it up, and
that is what we are seeking to do.
The Community Reinvestment Act was enacted more than 40 years ago and
has been one of our most powerful tools against redlining and the
perpetration of systemic racism and poverty.
Like so much of our country's history, the story of the CRA runs
through Chicago, where a local community organizer in the Austin
neighborhood, Gale Cincotta, led the fight against discriminatory
housing injustice and earned the nickname ``Mother of the CRA.''
Through her work with her neighborhood association and National
People's Action, Cincotta fought against redlining and disinvestment
from our communities using some of the innovative and confrontational
tactics that we recognize in today's protest movements.
My district is a working-class immigrant district, and Gale Cincotta
and organizers like her across the country fought to pass the CRA so
that communities like mine would not be left behind by financial
institutions.
The OCC's rule allows lenders to count activities that have nothing
to
[[Page H2576]]
do with improving our neighborhoods toward their requirements to serve
low- and moderate-income communities, decrease transparency, and make
it even harder to hold these institutions accountable. That is why we
oppose it.
Mr. McHENRY. Madam Speaker, I am prepared to close.
May I inquire if there are further speakers on the majority side.
Ms. WATERS. Madam Speaker, I have additional speakers.
Mr. McHENRY. Madam Speaker, I reserve the balance of my time.
Ms. WATERS. Madam Speaker, I yield 2 minutes to the gentleman from
Florida (Mr. Crist), who is a member of the Appropriations Committee.
Mr. CRIST. Madam Speaker, I would like to take this opportunity to
thank Chairwoman Waters for promoting access to capital for minority
borrowers.
Since the murder of George Floyd, our Nation has embarked on a true,
broad-based push to defeat institutional racism. America is coming to
realize that racism did not end with emancipation, and it did not end
with civil rights. It is still very much with us all today.
So, as we commit ourselves to Black Lives Matter, we need to also
ensure Black communities matter, Black homeownership matters, Black
wealth matters, and Black businesses matter.
My hometown of south St. Petersburg, Florida, is blessed by a large
and vibrant Black community where, despite their strength, pride,
character, and entrepreneurial spirit, we are still working to overcome
institutional racism. Underinvestment in the community, food deserts,
and redlining exist.
This past weekend, I witnessed the unveiling of the Black Lives
Matter mural in front of the Dr. Carter G. Woodson African American
Museum. It is right near one of my favorite restaurants on the south
side, Chief's Creole Cafe.
While the art moved me beyond words, reality quickly set in. The
owners of Chief's Creole, the Brayboys, were told by their bank that
they couldn't get a PPP loan, not because they didn't qualify, but
because the big banks are leaving behind the smallest businesses,
businesses overrepresented by Black, women, and veteran owners.
If the banks aren't making PPP loans to Black-owned businesses when
they don't have skin in the game, how can we trust them to do the right
thing when it is their own money at risk?
That is why the Community Reinvestment Act is so vitally important.
That is why we need it to work for the communities it was actually
designed to serve.
The OCC got it wrong. Vote ``yes'' to repeal the rule.
Mr. McHENRY. Madam Speaker, I reserve the balance of my time.
Ms. WATERS. Madam Speaker, if Mr. McHenry has no more speakers, I am
prepared to close.
Mr. McHENRY. Madam Speaker, I yield myself such time as I may
consume.
So, in closing, the Community Reinvestment Act, we agree, is an
important law that is intended to support underserved communities
across America. Maintaining the status quo also ignores the innovation
and the needs of our community.
The innovations taking place to financial services and to banking
over the last 25 years need to be addressed, but also the fact that we
are not actually meeting the needs desperately needed in communities
around our district, both the urban and rural.
The new regulations will increase investment and capital in
communities and provide more clarity and transparency to all parties
involved in the process. That is why it is a good update.
As we work to ensure a strong economic recovery for all Americans, it
is critical we encourage financial institutions to continue to provide
services for those most in need. The OCC's final rule will play an
important role in this recovery effort by encouraging more capital,
investment, and lending services in the communities hardest hid by
COVID-19. That is good.
The OCC took a very thoughtful approach, embracing input from other
agencies and stakeholders over the course of several years. The final
rule builds in nearly all of the constructive criticism the agency has
received through the open comment process. In fact, this shows the
agency is willing to compromise but not willing to settle for the
status quo.
The OCC's modernization of the CRA regulation is a long overdue
update that will help our communities come into the 21st century
stronger and healthier. The last time these regulations were revised
was in 1995, when banking received most of their deposits through
branches, and as such, the old regulations that are on the books still
rely heavily on branch locations.
Quite frankly, what we have seen over the last 100 days in America is
that branches are less vital than they were in previous generations,
because most of these branches have been shut down in our States
because our States are trying to do the right thing to address this
health crisis. That is why we are wearing masks, that is why we are
social distancing, and that is why we are trying to be responsible to
one another and be thoughtful in our approach to one another.
But, unfortunately, this bill before us is a very straightforward up-
and-down. I will say let's not support the status quo. Let's support
innovation and an update to our regulation to meet the needs of our
communities and to meet the needs that are so desperately needed both
in the rural communities and the urban communities in America.
Vote against this resolution and support the underlying rule.
Madam Speaker, I yield back the balance of my time.
Ms. WATERS. Madam Speaker, may I inquire as to how much time is
remaining.
The SPEAKER pro tempore. The gentlewoman from California has 8\1/2\
minutes remaining.
Ms. WATERS. Madam Speaker, before I move into my closing, I would
like to correct Mr. McHenry, who said the FDIC approved the OCC CRA
rule this week. That is not correct. My staff just called the FDIC to
confirm that they did not approve the rule.
Mr. McHENRY. Will the gentlewoman yield?
Ms. WATERS. I yield to the gentleman from North Carolina.
Mr. McHENRY. I misspoke. I said they supported the CRA.
Ms. WATERS. Madam Speaker, I yield myself the balance of my time.
Madam Speaker, I include in the Record multiple letters from dozens
of consumers, community and civil rights groups in support of H.J. Res.
90.
Chief Counsel's Office, Office of the Comptroller of the
Currency,
Washington, DC.
Attention: Comment Processing
We are writing to oppose the Federal Deposit Insurance
Corporation (FDIC) and the Office of Comptroller of the
Currency's (OCC) proposed changes that would seriously weaken
the Community Reinvestment Act (CRA) The U.S. Conference of
Mayors has strong policy supporting the CRA. The law was
passed in 1977 to end redlining, and to meet the credit needs
of communities where banks do business. Discrimination in
lending still exists.
But the FDIC and OCC proposed changes would make the banks
less accountable to their communities through complex and
confusing performance measures on CRA exams while
oversimplifying how bank's performances to local needs are
measured. Moreover, public input into the process will be
difficult and limited. This will result in significantly
fewer loans, investments and services to communities most in
need of more credit and capital.
The CRA has been of enormous benefit to low- and -moderate
income Americans. For example, since 1996, CRA-covered banks
issued more than 27 million small business loans in low-and
moderate-income tracts, totaling $1.093 trillion, and $1.076
trillion in community development loans that support
affordable housing and economic development projects
benefitting low-and moderate-income communities.
While such results are very good, the proposed rule will
make it all but impossible to continue such impressive
results. Moreover, much more can be achieved by regulations
that modernize the CRA to take into account changes in the
banking industry and the economy. For example, independent
mortgage companies not covered by CRA make more than 50
percent of the home mortgages in our nation. If anything, the
CRA should be strengthened to reflect changing demographics
and changes in the financial industry, and not weaken the CRA
as the proposed rule would do. We strongly encourage you to
reconsider a proposed rule, and look to modernizing CRA that
will truly benefit low and moderate income citizens.
Sincerely,
Justin Wilson, Alexandria, VA; Satya Rhodes-Conway,
Madison, WI; Alan L. Nagy, Newark, CA; Alan Webber, Santa Fe,
NM; Sam Weaver, Boulder, CO; Carlo DeMaria Jr., Everett, MA;
Robert Garcia, Long Beach, CA; Steve Benjamin, Columbia, SC;
Jerome A. Prince, Gary, IN; Brian C. Wahler, Piscataway, NJ;
Gregory J. Oravec, Port St.
[[Page H2577]]
Lucie, FL; Steve Adler, Austin, TX; Robert Donchez,
Bethlehem, PA; Jack W. Bradley, Lorain, OH; David J. Berger,
Lima, OH; Scott Conger, Jackson, TN; Joe Coviello, Cape
Coral, FL; Denny Doyle, Beaverton, OR; Hillary Schieve, Reno,
NV; Trey Mendez, Brownsville, TX; Patrick J. Furey, Torrance,
CA; Marcia A. Leclerc, East Hartford, CT; Jesse Arreguin,
Berkeley, CA; Jim Kenney, Philadelphia, PA; Nan Whaley,
Dayton, OH; Christopher L. Cabaldon, West Sacramento, CA;
Martin J. Walsh, Boston, MA; Allan Ekberg, Tukwila, WA; Jorge
O. Elorza, Providence, RI; Juan Carlos Bermudez, Doral, FL;
Frank C. Ortis, Pembroke Pines, FL; Bryan K. Barnett,
Rochester Hills, MI; Jacob Frey, Minneapolis, MN; Ron
Nirenberg, San Antonio, TX; Joy Cooper, Hallandale Beach, FL;
Lyda Krewson, St. Louis, MO; Steve Schewel, Durham, NC; John
Giles, Mesa, AZ; James B. Hovland, Edina, MN; Nathan
Blackwell, St. Cloud, FL; Hazelle Rogers, Lauderdale Lakes,
FL; Eric Johnson, Dallas, TX; Mark W. Mitchell, Tempe, AZ;
Tom Dailly, Schaumburg, IL; Andy Berke, Chattanooga, TN;
Pauline Russo Cutter, San Leandro, CA; Steve Gawron,
Muskegon, MI; William Peduto, Pittsburgh, PA; Lioneld Jordan,
Fayetteville, AR; Muriel Bowser, Washington, DC; Regina
Romero, Tucson, AZ; Geoff Kors, Palm Springs, CA; Acquanetta
Warren, Fontana, CA; Michael B. Hancock, Denver, CO; Mike
Duggan, Detroit, MI; Leirion Gaylor Baird, Lincoln, NE;
Keisha Lance Bottoms, Atlanta, GA; Greg Fischer, Louisville,
KY; Victoria Woodards, Tacoma, WA; Tim Keller, Albuquerque,
NM; Patrick L. Wojahn, College Park, MD; Louis `Woody' L.
Brown, Largo, FL; Ted Wheeler, Portland, OR; Erin J.
Mendenhall, Salt Lake City, UT; Daniel J. Stermer, Weston,
FL; John Cranley, Cincinnati, OH; Lori E. Lightfoot, Chicago,
IL; Carolyn G. Goodman, Las Vegas, NV; Christina Muryn,
Findlay, OH; James Allen Joines, Winston-Salem, NC; Sam
Liccardo, San Jose, CA; Jon Mitchell, New Bedford, MA; Robert
Restaino, Niagara Falls, NY; Chris Koos, Normal, IL; Lily
Mei, Fremont, CA; Bridget Donnell Newton, Rockville, MD;
Jeffrey Z. Slavin, Somerset, MD; Bernard `Jack' C. Young,
Baltimore, MD; Kenneth D. Miyagishima, Las Cruces, NM; Carol
Dutra-Vernaci, Union City, CA; Mary Casillas Salas, Chula
Vista, CA; Lucy K. Vinis, Eugene, OR; Thomas `Tom' C. Henry,
Fort Wayne, IN; Debra March, Henderson, NV; Andrew J.
Ginther, Columbus, OH; Kevin McKeown, Santa Monica, CA; Anne
McEnerny-Ogle, Vancouver, WA; Michael Vandersteen, Sheboygan,
WI; David Anderson, Kalamazoo, MI; Melvin Carter, St. Paul,
MN; Ashira Mohammed, Pembroke Park, FL; Amy Bublak, Turlock,
CA; Daniel Rivera; Lawrence, MA; William `Bill' Edwards,
South Fulton, GA; Richard C. David, Binghamton, NY; Katrina
Foley, Costa Mesa, CA; Shari Cantor, West Hartford, CT; Rex
Hardin, Pompano Beach, FL; Tracy Johnson, Lockington, OH.
____
California Reinvestment Coalition,
June 23, 2020.
CRC and CA Groups Support H.J. Res. 90
Dear Speaker Pelosi, The California Reinvestment Coalition
(CRC) and our member organizations and allies write in strong
support of H.J. Res. 90, the Congressional Review Act
Resolution to reverse the harmful rule recently finalized by
the Office of the Comptroller of the Currency (OCC) which
would gut the Community Reinvestment Act (CRA). Please find
following a letter from over sixty (60) California based and
California servicing organizations in support of the
Resolution.
The California Reinvestment Coalition builds an inclusive
and fair economy that meets the needs of communities of color
and low-income communities by ensuring that banks and other
corporations invest and conduct business in our communities
in a just and equitable manner.
The CRA is a critical piece of civil rights legislation
that has worked to fight historic and continuing redlining
practices, and to bring much needed lending and investment
into low-income communities of color. The CRA encourages
banks to help meet local community credit needs by creating
opportunities for homeownership, small business ownership,
job creation, financial capability, and affordable housing
and community development in neighborhoods that have been
otherwise excluded from the financial mainstream and the
American dream.
The OCC's harmful rule will reverse these gains by
substantially lowering the bar and enabling banks to get
passing grades through activities that are further and
further removed from low-income communities, homeowners,
tenants and small businesses. The OCC takes this damaging
action during a pandemic that has had a disproportionate
impact on the very communities meant to benefit from CRA.
We urge all members of Congress to co-sponsor and vote in
favor of this important resolution. Defending civil rights
and protecting communities ravaged by redlining and systemic
racism has never been more important.
Thank you for your concern regarding these issues and your
consideration of our views.
Very Truly Yours,
Kevin Stein,
Deputy Director.
Abundant Housing LA, AnewAmerica Community Corporation,
Asian Pacific Islander Small Business Program, ASIAN, Inc.,
CAARMA Consumer Advocates Against Reverse Mortgage Abuse,
Cabrillo Economic Development Corporation, California Capital
Financial Development Corporation, California Coalition for
Rural Housing, California Housing Partnership, California
Reinvestment Coalition, California Resources and Training,
CAMEO--California Association for Micro Enterprise
Opportunity, CCEDA, CDC Small Business Finance, Center for
Responsible Lending, CHOC, City Heights Community Development
Corp, City of Livingston, Coachella Valley Housing Coalition,
Coalition for Economic Survival (CES), Community Housing
Development Corporation, Community Economics, Consumers for
Auto Reliability and Safety, East Bay Asian Local Development
Corporation, East Bay Housing Organizations (EBHO), Fair
Housing Advocates of Northern California, Faith and Community
Empowerment (formerly KCCD), Family Financial Well-Being
Collaborative--Ventura County CA, Fresno CDFI dba Access Plus
Capital, Home Preservation and Prevention Inc DBA HPP Cares,
Housing Rights Center, LA Forward, Law Foundation of Silicon
Valley, Los Angeles LDC, Main Street Launch, Merritt
Community Capital Corporation, Mission Asset Fund (MAF),
Mission Economic Development Agency (MEDA), Multicultural
Real Estate Alliance for Urban Change, MyPath, Neighborhood
Housing Services of Los Angeles County, NeighborWorks Orange
County, Non-Profit Housing Association of Northern California
(NPH), Opportunity Fund, Oxnard Housing Authority, Pahali
Community Land Trust, Public Counsel, Public Good Law Center,
Public Law Center, Reinvent South Stockton Coalition,
Renaissance Entrepreneurship Center, Sacramento Housing
Alliance, Sacramento Housing and Redevelopment Agency, Self-
Help Federal Credit Union, Spanish Speaking Unity Council of
Alameda County, Inc., Strategic Actions for a Just Economy
(SAJE), Tenderloin Neighborhood Development Co, The Fair
Housing Council of San Diego, The Public Interest Law
Project, Ventura County Community Development Corporation,
Western Center on Law & Poverty, Women's Economic Ventures,
Working Solutions, Maria Benjamin (Deputy Dir, San Francisco
Mayor's Office of Housing and Community Development), Nick
Cortez (Chair, California Progressive Alliance), Mark Moulton
(Vice Chair, EPA CAN DO).
____
The Leadership Conference and National Community
Reinvestment Coalition,
June 23, 2020.
Hon. Nancy Pelosi,
Speaker of the House, House of Representatives, Washington,
DC.
Dear Speaker Pelosi: We, the undersigned organizations,
write to express our strong support for H.J. Res. 90, a
Congressional Review Act resolution of disapproval that will
nullify a rulemaking by the Office of the Comptroller of the
Currency (OCC) that, if allowed to stand, would drastically
undermine one of our nation's most important civil rights
laws, the Community Reinvestment Act of 1977 (the CRA).
Enacted in 1977, the Community Reinvestment Act (CRA) has
been vital in fighting redlining, a practice that
systematically--and for decades, as a matter of federal
policy--shut neighborhoods of color and lower-income
communities out from home loans and other essential financial
services. The CRA requires banks to undertake reasonable
efforts to lend to and invest in all of the neighborhoods in
areas where they do business. The law has helped to spur
increased investments in formerly-redlined communities. It
did not, however, prevent non-bank lenders (who are not
subject to the CRA) from flooding communities of color with
toxic subprime mortgages in the years before the 2008 crisis;
and research shows that racial disparities in lending--which
cannot be explained away by differences in credit scores--
persist to this day.
It is clear that the CRA needs to be modernized and
strengthened in order to fulfill its original purpose. But in
January, the OCC and the Federal Deposit Insurance
Corporation (FDIC) published a Notice of Proposed Rulemaking
(NPRM) that would instead significantly weaken the CRA. The
agencies proposed new overly simplistic metrics system that
would make it far easier for banks to pass their CRA exams by
making large investments in communities where they can reap
the largest rewards, rather than carefully-targeted, smaller
investments in underserved consumers and neighborhoods.
Even before the NPRM was published, a wide range of
stakeholders weighed in with both the OCC and FDIC to raise
concerns and to ask for more data justifying the changes.
Those concerns were not addressed, and the data was never
released. By the time the NPRM was published, the United
States and the world were just beginning to learn about the
growing threat posed by a dangerous new respiratory virus. In
the coming weeks, it became clear that the virus had not been
contained, and it spread rapidly to multiple countries
including the United States. As stakeholders and the public
began devoting more and more resources and attention to the
health, social, and economic fallout of the growing pandemic,
and many urged the OCC and FDIC to temporarily suspend
rulemaking not related to COVID-19, the agencies continued
plowing ahead, only agreeing to a one-month extension for
comments.
In the days before the deadline for comments on the rule,
it had become clear that COVID-19 was proving fatal to
communities
[[Page H2578]]
of color--the very communities the CRA was intended to help--
at a rate several times higher than the population at large;
the U.S. Surgeon General warned the public to prepare for
``our 9/11 moment,'' and models predicted 100,000 or more
deaths in the United States alone. Only 41 days after the
comment period ended, and even though only a minority of
commenters voiced support for the new framework, the OCC
rushed through a final rule that left it largely intact. The
FDIC, to its credit, declined to finalize its version of the
rule at this time.
In the weeks since the OCC finalized its rule, our nation
has been facing a long-overdue reckoning with our troubled
legacy of racial and ethnic discrimination. While much of the
conversation has rightly been focused on police brutality and
the impact of over-policing in communities of color, this
conversation is inexorably tied to the lasting economic,
social, and legal legacy of redlining and other forms of
racial discrimination.
We will not succeed in addressing issues surrounding law
enforcement in communities of color without also addressing
decades of underinvestment in housing, employment, education,
health care, transportation, and other factors that, to this
day, have contributed to the longstanding disparities that
are once again coming to light. Now is certainly not the time
to weaken the most important civil rights laws we have at our
disposal to correct those disparities.
As such, we urge Congress to support H.J. Res. 90, to
overturn the OCC's regulatory attack on the Community
Reinvestment Act. Thank you for your consideration.
Sincerely
Alianza Nacional de Campesinas, Americans for Financial
Reform, Color of Change, Consortium for Citizens with
Disabilities Housing Task Force, Consumer Action, Equality
California, Impact Fund, The Leadership Conference on Civil
and Human Rights, Matthew Shepard Foundation, National
Association for Latino Community Asset Builders (NALCAB),
National Association of Consumer Advocates, National
Community Reinvestment Coalition, National Community
Stabilization Trust, The National Council of Asian Pacific
Americans (NCAPA), National LGBTQ Task Force Action Fund,
National Urban League, Prosperity Now, Woodstock Institute.
____
June 23, 2020.
House of Representatives,
U.S. Capitol,
Washington, DC.
Dear Representative: The Center for Responsible Lending
writes to express our strong support for H.J. Res. 90, a
Congressional Review Act resolution of disapproval that will
invalidate the Office of the Comptroller of the Currency
(OCC) final rule on the Community Reinvestment Act.
The Community Reinvestment Act of 1977 (CRA) was one in a
series of landmark civil rights legislation and is a critical
tool to help our nation work toward overcoming the legacy of
redlining. Today's racial wealth gap and lending disparities
are in large part the result of decades of government
policies and practices that enabled the redlining of
communities of color for most of the 20th century. In the
post-Depression era, federal policies that created housing
opportunities for returning veterans and their families
explicitly excluded people of color from the benefits of
government-supported housing programs. Among these programs
were public housing, the Home Owners' Loan Corporation
(HOLC), and mortgage insurance through the Federal Housing
Administration (FHA). Not only did this redlining segregate
residential neighborhoods across the United States, but it
granted whites the ability to build wealth through
homeownership while denying equal opportunities for families
of color to build similar home equity over the same period.
The inequities that result from these discriminatory programs
are part of the injustices that today's people led protests
are demanding are addressed.
The CRA imposes continuing and affirmative obligations on
banks to help meet the credit needs of the local communities
in which they are chartered and continues to be an important
tool for fostering access to credit for these communities
today. The law has urged banks to more actively lend in LMI
areas; it has also played a key role in ensuring bank
participation in community revitalization efforts across the
country.
Despite the importance of CRA and the community investment
it has spurred, CRA rules must be strengthened. The CRA as
applied has not done nearly enough to revitalize previously
redlined areas and has not made a substantial dent in the
lagging homeownership rate for people of color. The white
homeownership rate is 73.7% while the rate is 44% and 48.9%
for Black and Latino borrowers respectively. Additionally,
bank lending in LMI communities and communities of color has
declined dramatically since the Great Recession. And existing
disparities will be further perpetuated in the face of the
COVID-19 global public health and economic crisis.
Unfortunately, the OCC decided to act unilaterally--without
the Federal Reserve and Federal Deposit Insurance
Corporation--to issue a structurally flawed final rule that
weakens the CRA and will harm low- and moderate-communities
and communities of color. Rather than postpone rulemaking to
focus on the devastating economic crisis caused by the COVID-
19 health pandemic, the OCC issued the rule a mere six weeks
after the closing of the comment period on its proposed rule
despite broad requests for delay from community groups, civil
rights and consumer organizations, and industry. The OCC
acknowledged in the preamble to the final rule that most of
the comments disagreed with the proposal's approach. Yet, the
OCC decided to side with the minority of comments in support
of the proposed rule. The OCC's rule will harm the
communities most adversely affected by the current crisis,
including many families that were hardest hit by the Great
Recession and have yet to recover.
The final rule imposes an overly simplistic evaluation
measure that fails to ensure that local banking needs are
met, and sanctions bank redlining. The rule overvalues the
dollar amount of CRA activities in comparison to the quality
of such activities and allows banks to earn more credit for
easier and larger investments in communities from which they
can get the highest return. Indeed, the rule permits banks to
ignore 20% of their assessment areas and still pass,
resulting in unchecked neighborhood disinvestment and
redlining. The rule also disincentives investment in LMI
neighborhoods and communities of color. It incentivizes
activities and investments that do not ``primarily'' benefit
LMI communities, such as large-scale infrastructure projects.
Estimating such projects' impact on LMI neighborhoods is
difficult and thus will likely divest funds away from smaller
scale, yet impactful community development activities.
Furthermore, the rule reduces the importance of retail
lending and retail services, resulting in less lending and
investments in communities that are already credit starved.
The rule is opposite to the CRA's statutory mission and will
cause deep harm to communities.
We urge support for H.J. Res. 90 to reverse the OCC's
regulatory attack on the Community Reinvestment Act. Thank
you for your consideration.
Sincerely,
Center for Responsible Lending.
Ms. WATERS. Madam Speaker, I would like to close by thanking
Representative Meeks for his leadership on this issue. I appreciate the
support we have received from our colleagues in this effort.
Make no mistake, unchecked, the OCC's final rule will harm low-
income and minority communities that are disproportionately suffering
during this COVID-19 crisis, and it will turn the Community
Reinvestment Act into the community disinvestment act.
In passing this Congressional Review Act resolution, we are not only
nullifying the OCC rule, but we are sending two clear messages:
regulators should be focused on protecting the economy from the
pandemic and not on removing safeguards, and that after the pandemic,
the OCC should go back to the drawing board and work with the Federal
Reserve and FDIC to jointly issue a new rule that strengthens the
Community Reinvestment Act and helps low-and moderate-income
communities, including communities of color.
For over a month now, by the thousands, Americans have been marching
in the streets for justice. They are standing up against racism and
fighting for justice for all. Just yesterday, this House passed
historic legislation to reform our Nation's police forces and the
unfair treatment so many people of color have experienced at the hands
of those meant to serve and protect.
As we unite to fight against discrimination in our criminal justice
system, we must also fight against discrimination, disinvestment, and
injustice in our financial system and economic injustice in our
communities. The OCC's rule would encourage disinvestment in
communities of color and lead to redlining on a massive scale. We must
stand up against this blatant effort to economically disenfranchise
hundreds of low-income and minority communities nationwide.
So I want to say to my Members on the opposite side of the aisle: I
have heard this theme that you support the Community Reinvestment Act
but you don't support my bill.
I would say to the Members: You can't have it both ways.
Madam Speaker, I ask for an ``aye'' vote on H.J. Res. 90, and I yield
back the balance of my time.
Mr. GREEN of Texas. Madam Speaker, I submit the following letters to
be included in the debate on H.J. Res. 90. The following letters
express support for H.J. Res. 90.
National Community
Reinvestment Coalition,
June 23, 2020.
House of Representatives,
U.S. Capitol,
Washington, DC.
Dear Representative: On behalf of the undersigned
organizations, we are writing to urge you to cosponsor and
support H.J. Res.
[[Page H2579]]
90, a disapproval resolution that would overturn a poorly
constructed rule change on the Community Reinvestment Act
(CRA) hastily finalized in May, days before Comptroller
Otting's resignation from the agency, and published this
month.
At the outset, it is critical to note that the Trump
Administration is split on the CRA final rule. With a lack of
interagency coordination among the nation's bank regulators,
different banks will be held to different reinvestment
standards depending on their regulator--an outcome that both
banks and advocates have cautioned against. Federal Reserve
Chairman Jerome Powell testified just last week that he
expects the agency to move forward with CRA updates intended
to garner ``broad support among the community of intended
beneficiaries'' something he considers to be ``one non-
negotiable condition for it.'' The OCC's final rule achieved
no such support or consensus. The vast majority of public
comments--about 90 percent--opposed the CRA evaluation
measure and presumptive ratings framework that remains at the
heart of the final rule, but the OCC adopted it anyway.
The OCC's final rule makes a series of changes to the CRA
regulatory framework that reduce incentives for banks to lend
to low-and-moderate income (LMI) families and invest and
serve LMI communities: home buyers and homeowners, small
businesses, community development projects that primarily
benefit and serve LMI people. It also expands the number of
banks that will have no review of how they open and close
bank branches and provide key bank services in LMI and
underserved neighborhoods.
These harmful changes could not come at a worse time. The
ongoing COVID-19 pandemic and widespread social unrest that
is gripping the nation has hit LMI and communities of color
the hardest and brought gapping disparities to the forefront.
The changes to the CRA being pushed through by the OCC would
do little to address the pressing national priorities of
reducing the racial wealth gap, of better serving those
traditionally underserved by the nation's financial system or
stimulating an economic recovery from COVID-19 that is
equitable. While the OCC claims its aim is to increase CRA
activity, the lack of interagency agreement among this
Administration's regulators should serve as a dire warning
about that claim. We do not yet know the full impact of
COVID-19 on local mortgage markets, small business
resiliency, or how LMI households, neighborhoods, local jobs,
and key sectors will recover. Weakening CRA at this moment is
a blueprint for a crisis after the crisis.
For all these reasons and more, we urge you to cosponsor
H.J. Res. 90 and support it when it is considered on the
House floor.
Sincerely,
National Groups
National Community Reinvestment Coalition (NCRC): AFL-CIO,
Americans for Financial Reform, Center for Community
Progress, Consumer Action, Local Initiatives Support
Corporation (LISC), NACEDA, National Association for Latino
Community Asset Builders (NALCAB), National Housing Resource
Center, National Housing Trust, National NeighborWorks
Association, National Urban League, Prosperity Now, The
Leadership Conference on Civil and Human Rights, UnidosUS.
Alabama
Titusville Development Corporation.
Arizona
Arizona Housing Coalition, Local First Arizona, Local First
Arizona Foundation.
California
California Coalition for Rural Housing; California
Reinvestment Coalition; California Resources and Training;
CDC Small Business Finance; EAH Housing; Grounded Solutions
Network; High Impact Financial Analysis, LLC; Peoples' Self-
Help Housing; The Greenlining Institute; VEDC.
Colorado
Urban Land Conservancy.
Connecticut
Neighborhood Housing Services of Waterbury.
District of Columbia
Africa Diaspora Directorate.
Delaware
Delaware Community Reinvestment Action Council, Inc.;
Edgemoor Revitalization Cooperative, Inc.; The Ministry of
Caring Inc.
Florida
Affordable Homeownership Foundation, Inc.; Community
Reinvestment Alliance of South Florida; Goldenrule Housing &
Community Development Corp Inc; Metro North Community
Development Corp.; Solita's House.
Hawaii
Hawai`i Alliance for Community-Based Economic Development.
Illinois
Accion Serving Illinois & Indiana; Chicago Community Loan
Fund; Chicago Rehab Network; Housing Action Illinois; NW
HomeStart, Inc.; Woodstock Institute.
Indiana
Continuum of Care Network NWI, Inc.; HomesteadCS; Legacy
Foundation; Prosperity Indiana.
Kentucky
River City Housing.
Louisiana
Multi-Cultural Development Center.
Massachusetts
Greater Boston Legal Services, Massachusetts Affordable
Housing Alliance.
Maryland
African American Chamber of Commerce of Montgomery County,
Maryland Consumer Rights Coalition, Maryland Consumer Rights
Coalition, Rebirth Inc., Residential Housing Counseling
Agency.
Maine
Coastal Enterprises, Inc.
Michigan
Fair Housing Center of Metropolitan Detroit, GenesisHOPE,
Habitat for Humanity of Michigan, Southwest Economic
Solutions.
Missouri
Metropolitan St. Louis Equal Housing and Opportunity
Council.
Mississippi
Hope Enterprise Corporation, Montgomery Citizens United for
Prosperity (MCUP).
Montana
Montana Fair Housing, Inc.
North Carolina
Reinvestment Partners.
New Jersey
NCRC Housing Rehab Fund, LLC; New Jersey Association on
Correction; New Jersey Citizen Action; New Jersey Community
Capital.
New Mexico
Southwest Neighborhood Housing Services.
New York
Association for Neighborhood and Housing Development
(ANHD); Banana Kelly Community Improvement Association;
Beaulac Associates LLC; BOC Capital Corp. CDFI; Business
Outreach Center Network; Center for NYC Neighborhoods; Chhaya
Community Development Corporation; Community Capital New
York; Community Development Venture Capital Alliance; CNY
Fair Housing, Inc.; Community Loan Fund of the Capital
Region, Inc.; Fair Finance Watch; Fidelis Federal Credit
Union; Fifth Avenue Committee; Genesee Co-op FCU; Greater
Jamaica Development Corporation; Habitat for Humanity New
York City; Habitat NYC Community Fund; La Fuerza CDC;
Neighbors Helping Neighbors; NYS CDFI Coalition; Oswego
County Federal Credit Union; PathStone Enterprise Center,
Inc.; Renaissance Economic Development Corp.; The Knowledge
House; Three Jewels Outreach Center; University Neighborhood
Housing Program.
Ohio
Cleveland Neighborhood Progress; Columbus Compact dba
Columbus Empowerment Corp.; County Corp.; Homes on the Hill,
CDC; Ohio CDC Association; The Fair Housing Center for Rights
& Research; Working In Neighborhoods.
Oregon
Housing Oregon.
Pennsylvania
Amani Christian Community Development; Beltzhoover
Consensus Group; Berks Latino Workforce Development
Corporation (BLWDC); Bloomfield-Garfield Corporation; Chester
Community Improvement Project; Fair Housing Rights Center in
Southeastern Pennsylvania; Good Bricks Ventures LLC; Hilltop
Alliance; Housing Committee; Jave Jive Coffee LLC; Mount
Washington Community Development Corporation; Northside
Leadership Conference; PHDA Pittsburgh Housing Development
Association, Inc.; Philadelphia Association of Community
Development Corporations; Pittsburgh Community Reinvestment
Group; Rising Tide Partners; Southwest CDC; The Enterprise
Center; Tube City Renaissance; Wilkinsburg Community
Development Corporation.
Rhode Island
HousingWorks RI.
Texas
Our Casas Resident Council INC., Recon Foundation, Southern
Dallas Progress Community Development Corporation.
Utah
Rocky Mountain Community Reinvestment Corporation.
Washington
Low Income Housing Institute.
Wisconsin
Citizen Action of Wisconsin; Disability Justice;
Metropolitan Milwaukee Fair Housing Council; Movin' Out,
Inc.; United Community Center; Urban Economic Development
Association of Wisconsin (UEDA); Washington Park Housing
Comm; YWCA Southeast Wisconsin; Revitalize Milwaukee.
____
National Housing Conference,
Washington, DC, June 22, 2020.
Hon. Nancy Pelosi,
Speaker, House of Representatives,
Washington, DC.
Dear Speaker Pelosi: I am writing on behalf of the National
Housing Conference (NHC) to express our strong support for
H.J. Res. 90, the Congressional Review Act resolution of
disapproval of the Community Reinvestment Act (CRA) final
rule.
The Office of the Comptroller of the Currency (OCC) has
issued its final CRA rule just six weeks after the end of the
comment period on the Notice of Proposed Rulemaking (NPR) and
amid the worst health and economic crisis of our lifetimes.
Implementation of this rule poses a material
[[Page H2580]]
threat to our recovery from the COVID-19 recession and
undercuts the purpose and intent of CRA, harming underserved
communities throughout the nation.
As NHC stated in its formal comment letter on the CRA NPR
on April 8, we have no idea how severely the pandemic will
impact our economy, the financial system and communities
throughout the nation. Committing resources to regulatory
initiatives that do not directly support our national
response to the COVID-19 pandemic is a dangerous distraction:
On April 27, NHC joined 14 other major national
organizations, including the National Association of REALTORS
and the National League of Cities, to urge regulators to
refrain from committing resources to regulatory initiatives
that do not directly support our national response to the
COVID-19 pandemic.
Notably, the Federal Deposit Insurance Corporation (FDIC)
and the Federal Reserve Board refused to join the OCC on this
ill-timed decision. As FDIC Chairman Jelena McWilliams noted
in her March 19, 2020 letter to the Financial Accounting
Standards Board, financial institutions ``will face unique
difficulties over the coming weeks and months to adequately
staff customer-facing functions; ensure that deposit, loan,
and IT systems operate normally; help borrowers that are
experiencing unanticipated cash flow difficulties; and
address the earnings and capital implications of near zero
percent interest rates and a potential surge in borrowers who
are unable to meet contractual payment terms.'' We could not
agree more.
CRA modernization is a once-in-a-generation opportunity.
There is much to improve, as the law and most recent
regulations were written before the proliferation of
interstate banking, internet banking and the revitalization
of America's cities; the latter being the opposite trend of
one of the two major reasons for CRA's adoption--urban
disinvestment--as well as the stubborn persistence of
redlining and its legacy impact. Instead, the OCC has pursued
an entirely new system that will gut CRA's effectiveness for
years and undercut broader efforts to address the very issues
that Congress attempted to solve in 1977, and still struggles
with today.
The OCC's rule has received nearly universal condemnation.
Using its ratio-driven approach, banks will be powerfully
incented to make only the largest investments in communities
that need it the least, and may also fuel the displacement of
those people who need it the most. This rule eliminates the
fundamental value of CRA, which at its best, levels the
playing field between large, highly profitable investments,
and the harder and smaller but still profitable deals that
often have disproportionately positive impact on communities;
and are by their nature, harder to get an allocation of
capital from a bank that we want to be governed by a culture
that focuses on a risk-weighted return.
CRA modernization is long overdue and needs to be done so
banks and communities get the clarity and flexibility they
need to ensure it has the maximum positive impact. But no
modernization effort is worth gutting the central purpose of
CRA--constructive reinvestment in the communities that need
it most. Consequently, the National Housing Conference
strongly supports H.J. Res. 90 and hope that once this
unprecedented national crisis is behind us, we can all work
together to fully realize the purpose and intent of CRA.
Sincerely,
David M. Dworkin,
President and CEO.
____
Hope,
June 23, 2020.
Hon. Nancy Pelosi,
Speaker of the House,
House of Representatives.
Support for H.J. Res. 90
HOPE (Hope Enterprise Corporation/Hope Credit Union/Hope
Policy Institute) supposes H.J Res. 90, providing for
congressional disapproval of the Office of the Comptroller of
the Currency's (OCC) final rule overhauling the Community
Reinvestment Act.
HOPE is a Black-led, women-owned community development
financial institution, credit union, and policy institute in
Jackson, Mississippi. HOPE was established 25 years ago to
ensure that all people regardless of where they live, their
gender, race or place of birth have the opportunity to
support their families and realize the American Dream. HOPE
has generated over $2.5 billion in financing that has
benefitted more than 1.5 million people throughout Alabama,
Arkansas, Louisiana, Mississippi and Tennessee.
The Community Reinvestment Act (CRA) has been a critical
tool for HOPE to leverage the resources it needs to serve
low-income communities, rural communities, and communities of
color in the Deep South. Unfortunately, the OCC's final rule
moves the CRA--and economic opportunity for our communities--
further out of reach in three ways:
Incenting larger, easier activities, potentially reducing
the smaller, more intensive investments that Deep South
communities so often need,
Deprioritizing meaningful CRA activities in the country's
most distressed communities, and
Diverting investments to activities far from the CRA's
original intent of redressing redlining.
As just one example, the OCC's failure to prioritize bank
branches in low-income and rural areas will be acutely felt
in the Deep South, where already much of the region is
already in a banking desert and includes areas with the
highest percentage of persons who are unbanked in the United
States. Mississippi and Louisiana, with over 15% of unbanked
residents, have the highest percentage among all states. The
rate of unbanked Black households is even higher, at 28% both
states. As made plain during COVID-19, these disparities in
access to banking relationships lay the foundation for
broader disparities in access to capital for small businesses
and individuals.
Ultimately, the OCC's final rule widens the wealth gap and
further inhibits economic opportunity in already hard-pressed
areas of the country, particularly here in the Deep South.
____
National Alliance of Community Economic Development
Associations,
June 23, 2020.
Representative Maxine Waters,
Chairwoman, House Financial Services Committee, Washington,
DC.
Dear Chairwoman Waters: Thank you for leading and actively
supporting H.J. Res. 90, a disapproval resolution to overturn
the Community Reinvestment Act rule change finalized by the
Office of the Comptroller of the Currency (OCC) in May 2020.
The National Alliance of Community Economic Development
Associations (NACEDA) and our members find the OCC's final
rule deeply problematic for low and moderate-income
communities for the reasons outlined in our public comment
letter dated April, 8, 2020.
The final rule addresses very few of the concerns we
expressed in our April letter. The final rule is deeply
problematic and fundamentally flawed.
To paraphrase FDIC Board Member Martin Gruenberg's
statement on December 12, 2019, in opposition to the proposed
rule, the proposed rule severely undermines what has been a
core strength of CRA for 40 years--the encouragement of bank
engagement and dialogue with stakeholders in local
communities, including community-based organizations,
community development corporations, and others, to understand
and better serve historically underserved areas. For this
reason and more, we support your committee's Congressional
Review Act resolution to overturn the rule change.
Sincerely,
Frank Woodruff,
Executive Director, National Alliance of Community Economic
Development Associations.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 1017, the previous question is ordered.
The question is on the engrossment and third reading of the joint
resolution.
The joint resolution was ordered to be engrossed and read a third
time, and was read the third time.
The SPEAKER pro tempore. The question is on the passage of the joint
resolution.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Ms. WATERS. Madam Speaker, on that I demand the yeas and nays.
The SPEAKER pro tempore. Pursuant to section 3 of House Resolution
965, the yeas and nays are ordered.
Pursuant to clause 8 of rule XX, further proceedings on this question
will be postponed.
____________________