American Banker Highlights CDFI Concerns About CRA Reform
On January 23, American Banker published an article entitled “Far from cheering CRA reform, CDFIs are worried,” which highlights how community development financial institutions (CDFIs) are voicing their concern about the recent proposal put forth by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) to reform the Community Reinvestment Act (CRA).
As discussed in a recent OFN blog article, the OCC and FDIC proposed sweeping reforms to CRA regulations that could significantly alter how regulators assess the banking industry’s community development activities and impact the availability of credit in low- and moderate-income communities. (Comments on the Notice of Proposed Rulemaking are due to the OCC and FDIC by March 9, 2020.)
Quoted in the American Banker article are OFN Chief External Affairs Officer Jennifer A. Vasiloff; OFN board member and CEO of Working Solutions Sara Razavi; and Eric Weaver, Founder and Senior Advisor at OFN member Opportunity Fund. All three caution that the emphasis on total loan dollar amount upon which banks would be evaluated for CRA compliance, rather than on total number of loans disbursed, will significantly harm small-dollar lenders and the people and communities who heavily rely on these CDFIs for quality, affordable services they cannot find elsewhere.
“CDFIs are able to be much more customized in their approach to lending, spend more time with the borrower, and provide technical assistance or counseling that mainstream banks aren’t as well set up to do,” Vasiloff said. “We can provide guidance and service that borrowers benefit from and improve the ability to pay the loan.”
Read the full article in American Banker. Please note this article is behind a publisher paywall.