Ranking Member Maxine Waters Applauds Final Rule to Strengthen Community Reinvestment Act

Statement

"I applaud the Fed, FDIC, and OCC for issuing their final rule to strengthen the Community Reinvestment Act (CRA). In 1977, Congress enacted the CRA, a civil rights piece of legislation, into law in response to decades of persistent racist policies in banking like redlining, where banks would systemically deny the provision of mortgages and other financial products and services to certain areas based on race or ethnicity. Redlining robbed Black families and other families of color of the opportunity to build wealth through the American dream of homeownership. Now, more than four decades later, the unfortunate truth is that the implementation of the law has not kept up with changes in the banking system, and as a result, not much has changed to turn the tide to ensure homeownership is truly a reality for all. In fact, as it stands today, the homeownership gap is wider now than it was in 1968 when redlining was legal. This is simply unacceptable and yet another reason why strengthening CRA's implementation is so critically important.

For many years, I've led the effort in Congress to both strengthen the CRA and guard against extremist attacks seeking to undermine it. Following the 2008 financial crisis, I pushed back against Republicans who had the gall to suggest it was CRA, not predatory lenders or greedy Wall Street bankers, that caused the crisis. Years later, when Joseph Otting, the former Comptroller of the Currency who was appointed by twice-impeached, four-times indicted, and found liable for sexual assault, former President Trump, proposed a rule to gut the CRA unilaterally, I led the charge to block this effort. I sent letters, convened Committee hearings, advanced legislation to stymie Otting's attacks on CRA, and led a delegation of Committee Democrats to attend a public FDIC Board meeting to protest Otting's extremist effort. I am very proud we were able to successfully block his harmful and unilateral attempt to gut the CRA, creating the space for the banking agencies to work together on a new interagency rule to strengthen how the CRA was implemented -- as they've done today for the first time in nearly three decades.

Let's be clear, the effects of redlining have worked to create a permanent underclass for communities of color and widened the racial wealth gap. Earlier this year in Los Angeles County, we watched as City National Bank settled for $31 million after the Department of Justice discovered that the bank had spent years redlining Black and Latinx families. The story is the same for communities across the country, with modern day-redlining observed in more than 60 metro areas while 98% of banks consistently get passing CRA grades.

With today's rule, we have a once in a generation opportunity to make meaningful steps toward ending redlining and its present-day manifestation. We have much more work to do, but I am pleased with the progress being made by this rule. I will be watching closely to see how our nation's banking regulators implement it and will craft any legislation that may be necessary to bolster this effort so we can end redlining once and for all."

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