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This campaign was conducted in 2004-2005. The federal financial regulators chose not to enact many of the proposed rule changes that would have caused the most difficulty for rural communities. Thanks for your help!
The Community Reinvestment Act (CRA) encourages banks to provide a modest amount of loans, investments, and services to poor and marginalized communities in their service areas. CRA has helped both hard-hit rural and urban communities create for themselves the services and facilities that more affluent communities take for granted.
The Office of Thrift Supervision (OTS) is trying to water down CRA by awarding credit to the savings institutions it regulates for any activity they do in rural and disaster areas. Million dollar mortgages for vacation homes will count. So will investments in golf courses and ski resorts. The OTS proposal also eliminates the requirement to meet credit needs of low and moderate income people and places.
OTS is also proposing to let large institutions design their own CRA exams. They may decide that they will do community development lending only, which means they won’t have to make investments or services available. So they won’t "need" to invest in Low Income Housing and Historic Tax Credits, and they won’t "need" to provide the elderly with low cost accounts or help workers from other countries send money home.
If these changes are approved, you can bet that rural community developers will find it harder to get funding and financing. As thrifts pull out of communities, it’s likely that abusive sub-prime and payday lenders will step in.
 The Federal Deposit Insurance Corporation (FDIC), which supervises banks across the United States, has this summer proposed rules to severely reduce the CRA obligations of 80% of the banks that are currently affected. Their plan would allow nearly all of these financial institutions to have a "streamlined" CRA review process. Critics (including low income housing advocates and civil rights organizations) say this change will result in harmful reductions in services to poor communities, especially in rural areas. The comment period for these changes ended in October 2004 - no action has been announced.
Learn more about the issue.
See video clips from around the country that tell part of the CRA success story.
You can contribute to the cost of running the campaign!
The folks at groundspring.org have provided us a secure means to accept contributions that might be tax-deductible for you.
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