[Congressional Record (Bound Edition), Volume 145 (1999), Part 10]
[Extensions of Remarks]
[Page 14069]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 14069]]

              IN SUPPORT OF THE COMMUNITY REINVESTMENT ACT

                                 ______
                                 

                           HON. JIM McDERMOTT

                             of washington

                    in the house of representatives

                        Wednesday, June 23, 1999

  Mr. McDERMOTT. Mr. Speaker, I'd like to take a moment to address an 
issue of great importance: fair and equal access to capital and credit. 
The American dream of providing for one's family and achieving 
happiness and security is bolstered when one is able to own one's own 
home or business. Unfortunately, the American dream fades away when a 
financial institution discriminates and unfairly denies a loan to a 
hardworking, creditworthy American who happens to be a minority or live 
in a minority or working class neighborhood.
  Fortunately, blatant discrimination in lending is declining, and 
homeownership and small business lending is on the rise. We can 
attribute much of this progress against so called ``redlining'' to the 
Community Reinvestment Act (CRA). Under CRA, federal banking agencies 
grade lending institutions on how well they meet the credit and capital 
needs of all the communities in which they are chartered and from which 
they take deposits. Community organizations, Mayors, religious leaders, 
and ordinary citizens have a right to offer their opinions regarding 
the CRA performance of lenders during CRA exams or when banks ask 
federal regulatory agencies for permission to merge with other lenders.
  In my hometown of Seattle, Washington, CRA has helped to make the 
dream of homeownership a reality for hundreds of low-income families. 
CRA negotiations between banks and community groups have resulted in 
housing programs like Self Help, which allows families to use sweat-
equity to help them purchase their homes. The Self Help program 
empowers traditionally underserved families to participate in the 
homebuying process. The program is also a unique tool for fostering 
community relations, as the families who eventually will become 
neighbors, begin to develop relationships with each other as they build 
their homes. Over the years, Self Help has worked with families to 
build over 500 homes, and CRA has been integral in financing this 
process.
  CRA also helps to create new jobs for the community. In the state of 
Washington, CRA has been a wonderful instrument by which entrepreneurs 
work with banks to finance loans for small businesses. As a result, The 
Evergreen Community Development Association--Washington state's top 
Small Business Administration lender--reports that CRA has leveraged 
over $360 million in the past five years for small business loans, and 
has created more than 5,000 jobs. Furthermore, CRA provides economic 
opportunities for individuals without spending a penny of taxpayer 
money. Thus, CRA works to put valuable money and resources back into 
the communities in which they are located.
  As the House of Representatives considers legislation to reform 
financial institutions, I must emphasize that I oppose any attempts to 
weaken CRA and thus deny communities access to much-needed mortgages, 
consumer and/or small business loans, and basic financial assistance.
  I urge my colleagues to stand firm and not undo the significant 
progress that we have made in expanding economic opportunities for all 
segments of our society. As we consider H.R. 10, let's continue to make 
the American dream a reality for millions more Americans by 
strengthening and preserving the CRA and data disclosure laws.

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