Advocacy groups urge withdrawal of proposed rule weakening Community Reinvestment Act

The National Fair Housing Alliance (NFHA), joined by 51 other organizations, and the Greenlining Institute have urged the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) to withdraw a proposed rule that would amend the regulations of the Community Reinvestment Act (CRA).

Critics argue the proposal would weaken the 1977 law designed to prevent redlining and ensure banks meet the credit needs of low- and moderate-income communities. The proposed changes would move hundreds of large banks into categories with lighter examinations, potentially leaving nearly 80 percent of banks subject to the least demanding tests.

Advocates claim the rule would reduce transparency, erode access to capital, and undermine support for affordable housing and community nonprofits. Specifically, the proposal is noted for narrowing the fair housing and fair lending violations that impact a bank’s CRA rating and potentially removing redlining from that list. Additionally, the rule may exclude Special Purpose Credit Programs (SPCPs), which have historically assisted thousands of borrowers in becoming homeowners.