Today, the U.S. Impact Investing Alliance joined many of our peers on the Coalition on Inclusive Economic in supporting the most meaningful update to a foundational community investing policy in nearly 30 years.
The Alliance and 15 organizations representing businesses, investors, nonprofits and community lenders submitted comments to the Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) in response to their joint rulemaking to reform the Community Reinvestment Act (CRA).
The CRA was signed into law at the tail end of the civil rights movement and requires banks to equitably serve their communities. The CRA is essential to the place-based work of impact investors who often invest alongside banks to promote local economic development.
The signatories of the letter applaud the regulators for proposing a thoughtful and aligned framework that goes a long way in modernizing and strengthening the CRA. They urge regulators to go further, however, in striving toward a CRA that more directly tackles racial wealth disparities, such as through improved collection of race-conscious data incorporated into strengthened CRA exams.
The Alliance also submitted more detailed comments to the regulators, emphasizing the importance of the CRA in catalyzing the flow of capital to critical intermediaries, such as community development financial institutions (CDFI) and minority depository institutions (MDI).
We look forward to continued engagement with the banking regulators on an issue that is core to a well-functioning community investing ecosystem.