The Businessweek cover plays into a long-standing trope that portrays borrowers of color as having caused the crisis because they supposedly took out loans they knew they could never repay. The only thing wrong with it is that it has no basis in fact.
The reason why the government stands behind the banks and insures them is because they are integral to our communities' growth and progress. If the banks turn their back on those communities, they have gotten away from their core purpose and do us all a grave disservice.
North Chicago Auto Service is a solid small business with deep ties to its community. Which is why its owner, Richard Otero-Cintrón, was so surprised to learn that his long-time bank had rejected his loan application.
CRA has a 30-year track record of success and, thanks to these proposed provisions, it will evolve with the needs of the new economy. CRA will extend its influence and continue to direct mainstream banks to underserved communities to ensure that families are not excluded from a fair lending market.
What if there was a law that told big corporations that they have responsibilities to the communities they serve? There is. It's called the Community Reinvestment Act and a fight over it's future is brewing in Congress.
These hearings that could improve the Community Reinvestment Act, the 1977 law designed to ensure banks remain connected to communities. Regulators decided it may be time to update how this law is enforced.
Recent legislation passed by both houses of the state legislature directs that all state funds be deposited in financial institutions that meet the credit needs of low- and moderate-income communities.
To ensure that all types of financial institutions are meeting the credit needs of their entire market area, including low-wealth communities and communities of color, the CRA assessment must be changed.