Recently, the Federal Reserve, Federal Deposit Insurance Corporation, and Treasury’s Office of the Comptroller of the Currency unveiled their eagerly anticipated Final Rule, a significant step towards modernizing and strengthening the administration of the Community Reinvestment Act (CRA) by the federal government. This transformative rule is set to be enforced starting April 1, 2024.
Let me give you a bit of context. The Community Reinvestment Act (CRA) was established by Congress back in 1977 with a noble purpose – to encourage banks to meet the credit needs of the communities they serve, particularly focusing on low- and moderate-income areas and populations. The CRA was meant to put an end to discriminatory practices, such as “redlining,” that were depriving these communities of the financial resources they deserved.
In an ideal world, this should have significantly empowered Native nations, their businesses, and consumers to access the capital they needed through banks complying with the CRA. However, the reality has been far from ideal. Native communities, often situated in the most impoverished parts of our nation, have been left underserved. Despite the promise of the CRA, banking institutions have not effectively invested in these communities, leaving a critical gap in access to capital.
The Native CDFI Network (NCN), standing at the forefront, spoke up. In August 2022, we submitted our public comments on the CRA Notice of Proposed Rulemaking, advocating strongly for a change. We demanded that the new CRA Final Rule not just incentivize but compel banking institutions to invest significantly in Native communities. This was not just a call for fairness; it was a demand for justice and equality.
The sad truth is that despite our collective efforts, redlining of Native nations and communities has persisted. The NCN, since its inception in 2009, has gathered substantial evidence showing that banking institutions have continued to neglect these communities. Recent years have seen this problem exacerbated by the consolidation of the banking industry and the subsequent withdrawal of bank branches from Native nations and communities.
But with the dawn of this new Final Rule, there is hope on the horizon. This is a crucial step forward. It is a testament to the power of advocacy, to the strength of our collective voice. Let us remain vigilant and continue to champion for the rights and opportunities of Native nations and communities. Together, we can create a future where every community, regardless of its background, is given the chance to thrive and prosper. Thank you, and let’s keep pushing for progress.