Senator Murray Praises Biden Administration Rescinding Harmful Trump-era Community Reinvestment Act Rule

Trump-era rule would have allowed banks to avoid anti-redlining protections

Senator Murray: “I want to be certain we are addressing income inequality—and in particular, the racial wealth gap—in a real and meaningful way. I am glad to see the Biden administration is committed to starting the process from scratch to update the CRA so that we see more lending and investment in underserved communities and communities of color.”

(Washington, D.C.) – Today, U.S. Senator Patty Murray (D-WA) issued the following the statement after the Office of the Comptroller of the Currency (OCC) announced it will put forth a formal proposal to rescind the Community Reinvestment Act (CRA) rule issued by the Trump administration in May 2020. Senator Murray previously urged the federal regulators to rescind the proposed rule change in a letter sent with 42 of her colleagues.

“This is a good a step in the right direction for Washington state families,” said Senator Murray. “The CRA is an important civil rights law meant to promote economic justice and give disadvantaged communities a fair shake, but the Trump rule would have allowed banks to claim loans for things like sports stadiums as community investments—that is not helping anyone who lacks access to credit and it certainly is not the intent of Congress. I want to be certain we are addressing income inequality—and in particular, the racial wealth gap—in a real and meaningful way. I am glad to see the Biden administration is committed to starting the process from scratch to update the CRA so that we see more lending and investment in underserved communities and communities of color.”

The Community Reinvestment Act is, in large part, meant to protect communities of color from discriminatory redlining and ensure banks are lending fairly to every segment of the community. Under the CRA, banks are assessed by federal regulators, including the OCC, to ensure they are making enough loans to meet the credit needs of the entire community, including low- and moderate-income neighborhoods. However, under the Trump administration’s rule change, banks would have been able to claim credit toward serving low- and moderate-income individuals for loans to facilities like sports stadiums that provide limited financial benefit to communities that see less investment from financial institutions—enabling lenders to pass their CRA examinations without making significant investments to all segments of the community, particularly communities of color. CRA examinations are critical to assess financial equity and often referenced by the Department of Justice when investigating potential cases of redlining.

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