Act Now to Really Enforce The CRA

Citizen Wealth Community Organizing Financial Justice Foreclosure Organizing

barneyfrankDauphine Island The Community Reinvestment Act (CRA) passed in 1977 occupies a lot of space in my book, Citizen Wealth, because it is both arguably the single largest legislative victory achieved by community organizations over the last generation and because it has helped millions purchase homes, one of the most dramatic creators of citizen wealth for lower income and working families, especially in minority communities.  The Obama Administration has proposed a super-cop, the Consumer Financial Protection Agency (CFPA), to ensure that CRA and other consumer protections are fully followed and enforced across the gamut of financial institutions.

Yippee, yi-ky-yay!  Thank god!

As Phyllis Salowe-Kaye, Executive Director, New Jersey Citizen Action recently wrote in the Star-Ledger:

“The CFPA proposed by the president would have broad institutional oversight of enforcement responsibilities for the wide range of financial consumer protection laws already in place, including CRA, and bolsters the chances of passage of the Community Reinvestment Modernization Act of 2009…This law would strengthen CRA as it is applied to banks and expand CRA’s reach to non-bank financial institutions. There is a critical need to have independent mortgage companies and other non-bank lenders subject to the same rules as banks. Quite simply, if you are doing the same business, you should be subject to the same rules.”

Amen!!  This is a big fight worth our time and energy even in these days and times when we are pushed between pillar and post fighting other big-ticket issues.

In New Orleans in the post-Katrina we learned a lot about house gutting.  We ran crews of workers and volunteers into homes to pull out all of the guts of the house down to the studs so that it could be rebuild.  From the outside it looked like a house.  From the inside it looked like a house skeleton.

The banks and other financial fast dealers are already acting like house gutters around CRA and the new CFPA.  House Financial Services Committee Chair Barney Frank (D-Mass) actually introduced the bill about a month ago without moving CRA under the new regime instead leaving it at the mercy of the current procedures.  This won’t work.  We have endured decades of dilution and watched one tooth after another being pulled from the CRA protections to the point CRA was often simply gumming banks while 70% of home mortgages before the crises were being loaned outside of CRA regulations.

There are some peoples’ heroes on that Committee like Maxine Waters (D-CA) and Al Green, our friend from Houston.  These committees are huge so there are a lot of friends and some folks who boycotting the census, so a little of everything.

We need to reach out for them now while it is on our minds and demand that they stand up to the big money lobbyists and put CRA in the Consumer Financial Protection Agency where it belongs and can finally do its job again.  When this financial catastrophe eases up, our people are going to need houses and be hard pressed to buy them without a CRA with real teeth and muscle.

Reach out to these folks now and put CRA under the CFPA where it can do some good:

Majority Members

Minority Members