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August 5, 2022

The Travesty of Zero Progress in Homeownership Rates in 45 Years Proves the Community Reinvestment Act (CRA) Has Failed and Must Be Strengthened

WASHINGTON, D.C.— Dennis Kelleher, Co-Founder, President, and CEO, issued the following statement after Better Markets filed a comment letter to rulemaking agencies on ways to update the Community Reinvestment Act (CRA):

“Credit, investment, and banking services have been unfairly if not illegally denied to too many Americans for too long.  The CRA was supposed to change that, but it has failed, as highlighted by one shocking statistic:  home ownership rates among the lowest income earners as well as Black and Hispanic Americans are no greater today than they were when the CRA was passed into law. Of course, there have been some positive effects, such as in promoting community development activities, but nonetheless there still has been forty-five years of literally zero progress in home ownership.

“For a law that was intended, designed, and enacted to address the despicable injustice of depriving low-income households, particularly minorities, credit to buy homes due to redlining, that is a failure that is hard to fathom.  However, juxtaposed to the 98% CRA pass rates for the banks, it is a travesty.  This has happened because the CRA’s implementation via regulators’ ‘assessment’ of banks’ CRA-related activities has been too focused on banks and not on the people who are supposed to benefit from the law.

“The CRA’s bank-focused assessments have allowed for unchecked examiner discretion that leads to nearly all banks passing year-after-year despite stagnant homeownership rates and growing wealth gaps for credit-deprived lower-income, Black, and Hispanic Americans.

“An updated CRA rule must implement the law in a way that provides a concrete, measurable, robust assessment of the provision of and access to financial firms, services, and products for lower-income individuals and communities, as detailed in our comment letter. Additionally, the rule must require the banking agencies to disclose full, complete, and properly formatted data to the public to ensure oversight and accountability.

“Specifically, the new rule must include the following:

  1. The retail lending test framework (perhaps the most important portion of the assessment because it includes mortgage and small business lending) must include:
    • Measurable, statistical benchmarks that would provide an alternative perspective on assessments and serve as a check on the validity of the non-statistical methodology of the proposed framework; and
    • “Backstop” metrics that set high-level, minimum standards and address limitations of the proposed framework.
  2. The community development lending and investment test framework must have measurability by including:
    • Measurable thresholds that are directly tied to assessment conclusions, similar to the proposed retail lending test framework, for the quantitative evaluation portion of the test; and
    • A defined structure for the qualitative evaluation portion, including how that structure maps to assessment conclusions.
  3. To account for the significant adoption of online and mobile banking and to maintain the “reinvestment” purpose of the CRA, the rule must have assessment areas not associated with the location of physical facilities that are based on concentrations of deposits rather than only on concentrations of loans, as included in the proposal.
  4. The rule must require the federal banking agencies to publish all available data annually for every bank (regardless of whether they are undergoing or have undergone a CRA-related examination) in an accessible, user-friendly interface that provides the public with visual analytical tools and an ability to dissect and download data.

“Implemented correctly, the CRA has the potential to be one of the most meaningful laws in improving the lives and livelihoods of tens of millions of Americans that have been mistreated, underserved or ignored entirely by the financial industry. We look forward to working with the federal banking regulators and others to finalize a rule that will include our proposed changes and achieve the law’s true potential for the people who are supposed to be benefiting from the law.”

You can find the fact sheet summarizing this comment letter here.


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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