Banking News

Ceres Calls on Federal Banking Regulators to Strengthen Racial and Climate Equity in the Community Reinvestment Act

Ceres Calls on Federal Banking Regulators to Strengthen Racial and Climate Equity in the Community Reinvestment Act

Ceres submitted comments to the Fed, the FDIC, and the OCC urging the agencies to modernize the Community Reinvestment Act (CRA) by explicitly incorporating racial equity and strengthening environmental and climate provisions. This NPR represents the most significant changes to the CRA regulations in over 20 years.

Latest Fintech News: Citizens Financial Group Announces Pricing of $800 Million of Citizens Bank, N.A. Senior Notes

The CRA requires federal banking regulators to encourage financial institutions to help meet the credit needs of the communities in which they do business, with a focus on low- and moderate-income (LMI) neighborhoods. Ceres’ submission is in response to requests for comments on the interagency notice of proposed rulemaking (NPR) on updating the CRA.

“Climate change exacerbates racial and economic inequality and frustrates the purpose of the CRA to end the nation’s long and painful history of lending discrimination against and the resulting disinvestment in communities of color and other financially vulnerable communities,” Ceres wrote in its comments.

Latest Fintech News: Metallicus Forms Advisory Board of Banking Regulatory and Compliance Experts

Ceres recommends the rule contains the following provisions:

  • Explicitly including the race of the borrower and community as a metric to ensure historically redlined communities, and those vulnerable to climate change, have improved access to credit and services.
  • Having banks leverage available data tools to understand where climate vulnerable communities are found within assessment areas and work towards driving investment to those communities.
  • A revised definition of community development activities to more effectively target activities to communities in need. Ceres supports the NPR’s addition of the disaster preparedness and climate resiliency definition under community development (CD) activities and an expanded, though non-exhaustive, list of eligible climate-related activities.
  • Measuring the impact of community development activities as well as establishing benchmarks and metrics to assess the strength of community development financing.
  • Encouraging banks to increase community engagement and relationship-building with climate and environmental justice organizations.
  • Avoiding adverse impacts to LMI communities from community development activities receiving CRA credit. Any activities that contribute to demonstrable adverse impacts or disproportionate consequences, such as displacement, predatory lending, and increased environmental hazards, should not receive credit, and should result in ratings downgrades.
  • Ensuring changes to assessment areas sufficiently capture online lending and deposit activity, particularly in smaller metropolitan areas and rural counties.
  • No changes to the asset threshold for small and intermediate small banks. This would decrease CRA responsibility for 20% of all banks, reducing community development financing and branching in LMI communities.

Latest Fintech News: Torches Launches on KuCoin Win and its Legendary Torchlight NFTs to Be Won

[To share your insights with us, please write to]

Related posts

RIA in a Box Launches Open API for MyRIACompliance at T3 Advisor Conference

Fintech News Desk

CoinShares & Finanzen Zero Announce Exclusive Crypto ETP Platform Partnership

Fintech News Desk

Niyo Raises US $100 Million in Series C Round Led by Accel and Lightrock

Fintech News Desk