February 16, 2021
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Proposal will
reinforce access to banking and credit services for low-income
communities and communities of color
Carson City, NV – Today, Nevada Attorney General Aaron D. Ford joined a coalition of 23
attorneys general in a comment letter supporting the Federal Reserve’s proposed
rule to strengthen regulations under the Community Reinvestment Act (CRA). The
CRA was enacted by Congress to prevent racially discriminatory redlining in
housing and to encourage banks and savings associations to help meet the credit
needs of all segments of their communities, including low and moderate income
neighborhoods and individuals.
“Low income communities and
communities of color continue to face inequities in our state and around the
country,” said AG Ford. “One of my goals as Nevada’s attorney general is
to advocate for equal rights and opportunities for all, which includes affording
fair and nondiscriminatory opportunities to buy a home, start a business, or
pursue education. I believe that this new rule proposed by the Federal Reserve
will take us one step closer to these goals.”
Since the CRA was enacted in
1977, it has helped direct trillions of dollars in investments back to low and
moderate income communities, increasing access to financial services and loans
that incentivize the availability of affordable housing and support small
businesses across the country. During the current economic and public health
crisis, safeguarding and strengthening the law’s mechanisms to tackle
persistent, structural inequality remains as important as ever. Compliance with
the CRA is overseen by three regulatory agencies: The Federal Reserve Board of
Governors, the Office of the Comptroller of the Currency (OCC), and the Federal
Deposit Insurance Corporation. On September 21, 2020, the Federal Reserve —
following rulemaking by the OCC that was strongly condemned by a multistate
coalition of attorneys general as
antithetical to the goals of the CRA — put out a request for comments
on its separate, independent proposal to strengthen, clarify, and tailor CRA
regulations to reflect the current banking landscape and better meet the core
purpose of the law.
In their comment
letter, the multistate coalition of attorneys general applauds the Federal
Reserve’s efforts and reemphasizes the CRA’s critical impacts, including on:
- Affordable housing and preventing
homelessness, with the
Federal Reserve's proposal taking steps to
help designate housing for very-low income, homeless, or other
harder-to-serve populations as being particularly
responsive for CRA evaluations;
- Serving financial needs of low and
moderate income communities, with
the Federal Reserve’s proposal expected to keep banks accountable
and responsive through community input in the evaluation process of
bank activities under the CRA; and
- Potential for increasing access to
credit and deposit services for small businesses hit hard by the
pandemic, with the proposal
tightening the definition of small businesses and farms in order to help
better meet the credit
and banking services needs of residents who may
have struggled to obtain relief.
In addition to AG Ford, the
following states are also participating in today’s comment letter: California, Connecticut,
Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan,
Minnesota, New Jersey, New Mexico, New York, North Carolina, Oregon,
Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and the District of
Columbia.
A copy of the comment letter
is available here.
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