Community Reinvestment Act Reform Update
In July, 1993, President Clinton requested that the four banking agencies begin a comprehensive review and overhaul of the regulation for the Community Reinvestment Act (CRA), a 1977 law prohibiting discriminatory lending practices and “redlining” of low-income and minority communities. The initiative to reform CRA was launched in response to complaints from both community groups and the banking industry that the existing CRA regulations were ineffective. Community groups complained that the current regulations were poorly enforced, the CRA rating system highly inflated (over 90 percent of banks receive a “passing” CRA rating), and that the regulations focused too much on the process of compliance with the regulations rather than on the actual lending performance by banks in low-income and minority communities. For their part, the banking industry complained about the excessive “paperwork burden” and costs associated with complying with the law.
In response, after holding public hearings across the country, the four banking agencies released proposed CRA regulations for public comment in December, 1993. From the community perspective, the regulations have a number of clear advantages over the existing regulations. CRA ratings are linked to performance-based tests such as a lender’s market-share in low-income census tracts, banks are now required to disclose small business and consumer lending, poor CRA ratings will lead to enforcement sanctions by the agencies, and the regulations include an option for banks to cooperate with community groups through “strategic plans.”
While these elements are a clear advantage over the existing regulations, the National Community Reinvestment Coalition (NCRC) and other community and consumer organizations have pointed out in their comment letters to the agencies that the regulations include a number of provisions that could undermine the positive steps forward. The proposed regulations include a de facto exemption for small banks (this is especially troubling for rural communities served by small banks), the standard for penalizing a lender for discrimination is weakened, small business data will not be collected by race and gender, and the regulations contain a number of disturbing loopholes for banks.
Even more troubling, the regulatory agencies – under pressure from the banking industry – are reconsidering some of the key elements of the proposed rule, including the market share test. As the regulators consider backtracking from the proposed regulations, many banks, who believe they may not fare well under the proposed regulations, are pressing the agencies to return to the CRA status quo. NCRC is concerned that these developments may slow the momentum for meaningful CRA reform. It is essential that community and consumer organizations express their concerns about CRA reform to the banking regulators.
NCRC is asking groups to express their concerns on CRA reform to President Clinton and the bank regulatory agencies. A sample letter, and an analysis of the proposed regulations, is available from NCRC at 202-986-7898 or e-mail at email@example.com.
Woody Widrow, Vice President, NCRC
Housing Justice Campaign Theme of NLIHC Conference
A few weeks before the Annual Conference of the National Low Income Housing Coalition/Low Income Housing Information Service (March 16), I attended the Annual Conference of Housing California. There, instead of running around dealing with crises, as often happens at our conference, I had the leisure to see the many small conferences that make up a large one – the organized environment within which HUD tenants or other low-income activists can build their collective strength; the huddles where battle-hardened advocates gather to warn each other about the enemy’s latest tactics; the community of those who call on a religious faith, or are called on by that faith; and the formal and informal seminars in which housing professionals gather to brush up on the latest program nuances.
At the NLIHC Conference, the only nationally organized group of residents of HUD-assisted, privately-owned complexes gathered, as it has since 1989. Much of its business concerned the ongoing process of establishing the National Alliance of HUD Tenants (NAHT); but even more important was the hard work of resident leaders and organizers, NAHT officers, and LIHIS staff, to create a situation where more than 70 low-income tenants could each feel powerful and effective. People who get no respect from landlords, management, local government or local HUD officials met directly with the bosses of those local HUD officials – with the people who set the rules their landlords follow. NAHT officers even met with HUD Secretary Cisneros. Questions were answered and commitments were made and confirmed.
Throughout the conference, workshops on matters from housing counseling how-tos to the latest rural housing initiatives were held. But, in keeping with the Conference theme, Fighting for Housing Justice: Moving Housing to the Top of the Nation’s Agenda, there were also sessions, including an exciting plenary, on advocacy. It was made clear that everyone working in housing has the responsibility to make the case for housing. Speakers from many backgrounds talked about reaching out to students, civil rights workers and others, and then took that discussion into small workshops. NLIHC worked with a national Interfaith Advisory Committee to set up a training meeting on faith-based organizing and advocacy.
One opportunity that can only be provided in Washington is a chance to interact directly with the federal government in its natural environment. Our Lobby Day activities gave hundreds of people from around the country the experience of walking into the offices of their Congressional Representative or Senator. Perhaps the most important lesson advocates learn from Lobby Day is how vast is the ignorance about low-income housing issues on Capitol Hill and the extent to which we have to educate all of these people. Going to HUD is helpful too. Just seeing the worn and weary halls of the HUD building helps explain why HUD works the way it does.
At the California conference, I watched in fascination as a group of advocates for earthquake victims traded tips on how to improve services from groups like the Red Cross. It was a part of the advocacy world that was new to me. At our conference, state coalition staffers compared notes on a part of the world of advocacy that is frustratingly familiar to many of us – how to raise funds for advocacy. It’s an issue that will be revisited at future meetings. State coalition staffers also helped LIHIS staff examine effective ways to build the Housing Justice Campaign we are beginning to wage.
At the NLIHC/LIHIS Conference many different goals were met. At a time when low-income housing needs every friend it can get, an specially important goal was to move all housing activists and professionals towards becoming housing advocates.
Larry Yates is the director of field services for the National Low Income Housing Coalition. For more information about the Housing Justice Campaign, call 202-662-1250.
NCEPA and Community Economic Development
For the past few years, Congress and the administration have stood poised to launch a national partnership with community development corporations (CDCs). If enacted, the National Community Economic Partnership Act (NCEPA) would provide financing, training and technical assistance through CDCs to entrepreneurs working to revitalize their communities. Most funds would provide credit to establish revolving loan funds to finance business development projects. CDCs would be required to provide matching dollars.
Despite substantial support, NCEPA has reached the legislative brink of enactment time and time again only to become the last minute casualty of political or budgetary processes.
The strength of the nation’s 2,000+ CDCs has been well documented. Despite this, NCEPA has failed to materialize. Today, its fate rests as a component of the Crime Bill. The Senate included NCEPA in its version of the Crime Bill, while the House did not. The final decision will be made in conference committee. Given the strengths of the nation’s CDCs and the structure of NCEPA, why the delay?
The answer appears to be threefold. For one, a current tone in Washington casts a shadow over any legislation that requires new funds. Secondly, skepticism about the role of CDCs beyond housing development diminishes opportunities for new federal investment in economic development. Finally, no national will exists to support CDCs since the general public is simply unaware of the existence of the community economic development (CED) industry.
The struggle to enact NCEPA continues and will hopefully have concluded in a victory by the time of this printing, but an additional emphasis must be made to include a role for CDCs in programs that already exist. While CDCs have clearly achieved their greatest success in housing, this happens to be where the greatest federal investment in CED has been placed (of course, even this is far too small). Once federal investment of an appropriate level is given to low-income business development, the number of successful businesses and new jobs will increase proportionally.
Until new investments are made, however, regulatory change must be sought. Successes in this arena have already occurred. Current CDBG economic development proposals broaden regulations to include room for microlending through nonprofit organizations. Federal agencies and Congress need to become familiar with the comprehensive impact of CDCs. CDCs must become active partners in the implementation of federal programs that deal with a range of issues from small business lending at HUD, to job training at the Department of Labor, to child care and other social services at Health and Human Services. This will not only leverage untouched resources, but it will also provide an institutional base to secure policies such as NCEPA.
A final obstacle to investment is public apathy and ignorance. Just as federal agencies and Congress need to become familiar with CDC successes, so does middle America. By the end of this year, the National Congress for Community Economic Development (NCCED) will complete the third census of the achievements of CDCs, detailing housing production, new jobs generated, and progress in comprehensive development. In each community, residents from all socio-economic levels need to become aware of CDC activity through the media, local politicians, churches, and schools. Just as CDCs need to become the subject of discussions in board rooms and in congressional hearings, a national education campaign must elicit debate among the public.
With the election of President Clinton, many of us believed that a window of opportunity had opened in public policy. In many ways it had, and hopefully, NCEPA will stand as testimony to achieved investments. At the same time, an opportunity remains to build an institutional base for CED. Certainly, new funds are a part of this process, but longer term strategies may lie in regulatory flexibility that allows room for CDCs to leverage federal programs, and an increased perception among the voting public of the role of CED .
David Nelson is the acting director of public policy for the National Congress for Community Economic Development. For more information, call 202-234-5009
“You Don’t Need A Home to Vote” Campaign Targets November Elections
With all U.S. House Members and one third of the U.S. Senate up for re-election this year, the “You Don’t Need A Home To Vote” campaign is gearing up for this crucial off-year Congressional election. Increased homeless voter registration/education/get-out-the-vote efforts could have an impact on this fall’s local, state and federal election races.
Initiated in 1992 by NCH, the “You Don’t Need A Home To Vote” non-partisan registration/voting rights campaign seeks to both protect and promote the right of homeless people to vote. The campaign has been using a five-pronged strategy of registration, education, get-out-the-vote on Election Day, legislation (state & federal) and litigation.
The week of September 18 through 24 has been designated as a time for local voter registration efforts, with Thursday, September 22 being declared National Homeless Voter Registration Day. And, during the week of Oct. 2 – 8, the National Low Income Housing Coalition and NCH will coordinate local Congressional candidates’ forums on housing and homelessness.
State and Federal Voting Rights
Thirty-six (36) states require that a homeless person have a mailing address in order to register; 29 states have only verbal policies giving homeless people the right to vote; only 14 states have written policies on homeless voter registration; only three states (Illinois, Maine & Oregon) have passed laws giving homeless people such a right; and there is no federal law explicitly giving homeless people the right to vote.
Illinois passed the first homeless voting rights law in 1992, and Maine and Oregon passed laws in 1993.
As of March, 1994, bills are now pending in California, Michigan, Nebraska, Pennsylvania, Rhode Island and Vermont. NCH wants to work with local advocates to have these bills passed and to work with other local/statewide homeless/ housing coalitions to have legislation introduced.
On a federal level, a bill has been introduced in this current session of Congress that would give homeless people the right to vote. HR 1457 already has over 70 U.S. House sponsors, and there are plans to have a companion bill introduced in the U.S. Senate.
NCH wants to expand its efforts to mobilize the grassroots in support of HR 1457.
Individuals/Organizations Needed to Participate
NCH is seeking individuals and organizations who are willing to endorse and/or participate in this year’s campaign.
The 1994 campaign packet includes: Tips for Organizing a Voter Registration Party, a survey to find out how many homeless people in your area are registered, a quiz on voter registration policies/laws for homeless service providers, state-by-state breakdown on homeless voter registration policies/laws, Candidates’ Forum Organizing Guide, new brochure and poster, and copies of proposed state and federal legislation. For a copy, contact: Michael Stoops, Project Director, “You Don’t Need A Home To Vote,” c/o NCH, 1612 “K” St., NW, #1004, Washington, DC 20006. 202-775-1322, 202-775-1316 (fax) or e-mail, firstname.lastname@example.org