WHEREAS, the NAACP has an existing policy in strong support of the Community Reinvestment Act (CRA); and
WHEREAS, the Community Reinvestment Act is one of the most effective tools for leveraging loans and investments, for low- and moderate-income neighborhoods. It also mitigates foreclosures by requiring banks to lend consistent with safety and soundness; and
WHEREAS, CRA encourages banks to respond to a variety of needs in low- and moderate-income (LMI) communities, ranging from financing affordable rental housing homeownership, and small business creation to economic development. Federal agencies conduct Community Reinvestment Act exams and rate banks based on the banks' lending, investing, and provision of services and branches in Low Moderate Income neighborhoods; and
WHEREAS, since 1996, banks have made community development loans totaling more than $407 billion. They also made small business loans of more than $581 billion in Low Moderate Income neighborhoods from 1996 through 2007; and
WHEREAS, points to banks for foreclosure prevention efforts including counseling and modifying loans. Community Reinvestment Act exams penalize banks for making loans that are unfair and deceptive; and
WHEREAS, according to the Federal Reserve Board, only 6 percent of all high-cost loans in 2006 (a boom year for high-cost lending) were considered on bank Community Reinvestment Act exams. Banks consistently have issued a smaller percentage of high- cost loans over the last several years than independent mortgage companies not covered by Community Reinvestment Act; and
WHEREAS, the Community Reinvestment Act is currently in a position to be expanded and modernized; such a move could bolster the accountability of banks to all communities.
THEREFORE, BE IT RESOLVED, that the NAACP supports the expansion and modernization of the Community Reinvestment Act. Specifically, the Community Reinvestment Act should be expanded to require Community Reinvestment Act exams in the great majority of geographical areas banks serve. Currently Community Reinvestment Act examines banks in areas where they have branches but not in other areas where lending through brokers; and
BE IT FURTHER RESOLVED, that the modernization of the Community Reinvestment Act should address racial disparities in lending by requiring Community Reinvestment Act exams to explicitly consider lending and services to minorities in addition to Low Moderate Incomes communities. These disparities would be narrowed if the Community Reinvestment Act scrutinized bank performance in serving minority communities; and
BE IT FURTHER RESOLVED, that the NAACP educate its units on the Community Reinvestment Act; therefore units must report its findings and all other questions to the Field and Membership Department; and
BE IT FINALLY RESOLVED, that the NAACP continues to support the Community Reinvestment Act and calls on Congress and the Administration to expand and modernize the Act so that it is even more effective.