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Community Reinvestment Act Rule Will Modernize Fair Lending

WASHINGTON, D.C. – The Federal Reserve System, Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation today released their final amendments to the rules implementing the Community Reinvestment Act. In response to the final rule, Anne Perrault, finance policy counsel with Public Citizen’s Climate Program, released the following statement: 

“Modernizing and strengthening the Community Reinvestment Act rule marks a major step forward in responding to the needs of low-and-moderate income (LMI) communities, particularly those attempting to deal with increasingly severe climate-related impacts. Since their last update, banking has transformed, allowing banks to serve a client base that goes beyond individual branches. The rule will allow agencies to police discrimination against LMI applicants in these areas, and also reduce existing “grade inflation”—banks receiving credit for activities that aren’t helping these applicants. In these, and other ways, the rule will help communities better prepare for climate change. Regulators have adapted the Community Reinvestment Act for a new era and have taken many positive steps toward updating these banking protections for communities. 

“While the draft guidelines explicitly aimed to prepare communities through ‘climate resiliency,’ it is puzzling why the final rule mentions only ‘weather resilience.’ This change masks the source of many credit problems for LMI communities—increasing climate change-related impacts—and downplays the scope of these problems. It is hard to resist concluding that the textual change indicates there is a climate denier influencing policy making at one of the banking agencies, which is deeply troubling. 

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