HousingWorks Austin continues to utilize the comments we received from our 2016 summit Housing +Health: Building Blocks of Equity and Opportunity, which we hosted in partnership with the Federal Reserve Bank of Dallas and Children’s Optimal Health. One of the comments we received asked that we provide information about how community-based organizations can help financial institutions achieve the objectives of the Community Reinvestment Act (CRA).

On March 2, 2018, HousingWorks and the Dallas Fed hosted a Next Steps Forum on the CRA, thanks to sponsorship from Ascension-Seton Healthcare. The CRA is a federal law passed in 1977 that is designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods. This was an effort to combat discriminatory lending practices in lower-income neighborhoods, a practice called “redlining.”

Julie Gunter of the Federal Reserve Bank of Dallas

Presentations at the CRA forum covered CRA basics for community-based organizations including evaluation and ratings, types of activities, partnerships and resources. Some examples of community development services that organizations can take advantage of through the CRA include:

• • Providing financial services through branches and other facilities.
  • Providing professional expertise on management issues
  • the Loaned Executive Program
  • Credit or foreclosure prevention counseling
  • Financial planning to promote community development
  • School savings programs
  • Serving on the board of directors for a community development organization
  • and International remittance services that increase acccess to financial services for low- and middle-income residents.

Speakers included Julie Gunter of the Federal Reserve Bank of Dallas, Linda Gabriel of the Federal Deposit Insurance Corporation and Scarlett Duplechain from the Office of the Comptroller of the Currency. Attendees were advised that when banks consider partnering with a community-based organization, they look at whether the organization has the capacity, experience and resources to see a project through to fruition as proposed.

The forum closed with the presentation of a report prepared by the Federal Reserve Bank of Dallas titled “CRA at 40.” The report found that the CRA has been a significant and effective tool for ensuring financial investment in many otherwise underserved communities. The report says, “The estimated $5.88 billion of community development dollars that Texas sees every year—mostly in the form of investments or loans with an expectation of a financial return—can go a long way to funding impactful and innovative community projects.”

The report also points out some areas where the CRA can be improved, such as broadening its scope and providing more incentives in the CRA to address rural issues—to maximize the CRA’s impact, ensure its responsiveness to all communities and reinforce its role as a strong community development tool for future generations.  That report can be found here: CRA at 40.