Nov. 21, 2018, SAN FRANCISCO – Bank Regulator Attempts to Gut Community Reinvestment Act, Is Met by Resistance

California community organizations, organized by the California Reinvestment Coalition (CRC), called on Trump appointee Joseph Otting, who heads the Office of the Comptroller of the Currency, to withdraw proposed changes to enforcement of the federal Community Reinvestment Act (CRA). Passed in 1977 as part of Congress’s response to discrimination in housing and lending, known as “redlining,” the CRA obliges banks to help meet the credit and capital needs of low- and moderate-income (LMI) communities. The law requires banks to lend and invest without discrimination throughout all of the areas where the banks take deposits, specifically targeting LMI communities.

CRC has tangled with Mr. Otting before, when he was head of OneWest Bank. In 2014, the Coalition opposed OneWest’s merger with CIT Bank on the basis that the bank had failed to meet the needs of low-income communities for loans and investments, among other reasons. In 2016, CRC filed a complaint with the Department of Housing and Urban Development alleging redlining by OneWest Bank against neighborhoods of color.

Mr. Otting has been quoted as saying that he went to Washington with the intent to change CRA. Under his direction, the Office of the Comptroller of the Currency recently issued a request for public comments on proposed changes to the CRA that, if implemented, would drastically weaken the law. CRC’s comment letter can be found here.

“He is proposing the most extreme attack on rules that require banks to engage with low income communities that we have ever seen,” said Paulina Gonzalez-Brito, executive director of CRC. “This is a raid on our communities on behalf of banks that need stronger enforcement of community protections, not less.”

“Mr. Otting is hoping to usher in a resurgence in banking discrimination. The changes contemplated by his proposal would result in a dramatic loss of loans and investments, and California stands to lose the most of any state, with a potential loss of $25 billion in the next five years. As the fifth largest economy in the world, that loss to the state’s low- and moderate-income communities would dramatically and severely contribute to wealth and income inequality, affecting some of the most vulnerable populations, including immigrants, communities of color, seniors, and children.” Said Ms. Gonzalez-Brito.

In the last five years, CRC has worked with banks across California to form public, measurable CRA plans to lend, invest, and provide financial services worth over $25 billion in LMI communities by 2026. Banks that respond to CRC’s annual surveys have indicated they lent over $27 billion in 2016 in LMI communities throughout California, and had over $31 billion in total CRA activity, including investments, philanthropy, and contracting with minority- and women-owned businesses.

Along with CRC, California community groups that submitted letters include:

Asian Inc.

Bay Area Development Corp.

California FarmLink

California Resources and Training (CARAT)

Community Legal Services of East Palo Alto

Coachella Valley Housing Corporation

Community Corporation of Santa Monica


Fair Housing Advocates of Northern California

The Interfaith Council of Contra-Costa County

Main Street Launch

Mission Economic Development Agency

Mutual Housing California

My Path

Northern California Community Loan Fund

Opportunity Fund

Tenderloin Community Development Corporation

Thai CDC

The Unity Council

Visionary Homebuilders

Working Solutions


About the California Reinvestment Coalition

CRC is a statewide network of more than 300-member nonprofit organizations that work to build a just, inclusive, and sustainable economy. CRC members include affordable housing developers, community development financial institutions (CDFIs), small business lenders and technical assistance providers, tenants’ rights organizations, legal services providers, and other direct service and advocacy community-based nonprofits that work in LMI communities across the state in both urban and rural geographies.

Contact: John Hoffman (415) 864-3980