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February 17, 2021

Modernizing Community Reinvestment Act Necessary to Meet Credit Needs of Underserved Communities


Wednesday, February 17, 2021

Contact: Pamela Russell at 202-618-6433 or

Modernizing Community Reinvestment Act Necessary to

Meet Credit Needs of Underserved Communities

Fed Must Commit to Overcoming Any Potential “Burden” to Banks

Washington, D.C.  –  Stephen W. Hall, Legal Director and Securities Specialist, issued the following statement after Better Markets filed a comment letter with the Federal Reserve on ways to modernize the rules implementing the Community Reinvestment Act (“CRA”).

“Better Markets supports this promising early step in the Federal Reserve’s effort to update and strengthen implementation of the CRA. Passed in 1977, the CRA was intended to improve access to credit and banking services in historically underserved communities. But for far too many Americans, the promises of the CRA have remained unfulfilled.

“As observed in the request for comment, the harmful legacy of redlining and other discriminatory practices continues to be felt. The wealth gap remains largely unchanged over the last 50 years, and a huge swath of American society remains un- or under-banked. This deficit is disproportionately large among Black and Hispanic households. These Americans are denied access to personal loans, home mortgages, and small business loans. Often, they are forced to turn to expensive and often predatory alternatives, such as payday lenders or check cashing services to meet their basic financial needs. All of these facts, coupled with huge changes in technology, require a new and stronger approach to the CRA.

“In our letter, we set forth a number of important considerations or cautionary points that the Fed must bear in mind as it develops new rules. For example, while the banking industry can be expected to resist any new regulatory costs or burdens, the Federal Reserve must discount those arguments. For a century, the financial services industry has routinely predicted dire consequences from new rules, yet they fail to materialize and banks continue to log record profits. Moreover, to the extent new regulatory requirements are necessary, Congress has already decided, in passing the CRA, that such measures are necessary and appropriate to make banking fairly accessible in all communities. As we note in our comment letter, the Federal Reserve must take specific and targeted regulatory action to undo the damage inflicted by centuries of explicit racial discrimination.”


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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