Sign and Send a Comment to Help Close the Housing Divide!

Federal banking regulators took a giant step forward in introducing a new proposed rule that will update the Community Reinvestment Act (CRA).

The CRA is a federal law that was designed to encourage banks to meet the credit needs of all communities they serve, including low- and moderate-income communities and to prevent redlining, the practice of financial institutions denying credit, banking, and home services to certain neighborhoods.

Redlining prevented investments in areas that were occupied primarily by Black communities and communities of color -- areas that were already more susceptible to environmental hazards, such as flooding.[1] As these communities were unable to secure the financing they needed for home repair, green spaces, drainage systems, and other measures needed to respond to environmental and climate-induced harms, they suffered health and financial challenges.

The consequences of our legacy of environmental racism and redlining are clear. Today, many Black Americans live in areas that are the most vulnerable to climate extremes and environmental hazards. For example, in two-thirds of states, minority neighborhoods shoulder more undisclosed flood risk than the state average.[2]

Urban heat islands occur when cities replace natural land cover with dense concentrations of pavement, buildings, and other surfaces that absorb and retain heat. This effect increases energy costs, air pollution levels, and heat-related illness and mortality. Urban heat islands tend to correlate with areas of cities that have been historically redlined and not invested in.[3] Residents of formerly redlined neighborhoods are at increased risk of health issues like preterm birth, cancer, tuberculosis, and maternal depression.[4]

If regulators truly want to close widening racial disparities, they must take measures to provide credit and service access that help protect historically redlined communities from climate and environmental disasters.

Demand federal banking regulators prioritize redlined communities of color and give them the tools they need to prepare them for climate disasters by adding your name now!

[1] Reuters
[2] Quartz
[3] Enterprise Community Partners
[4] Lown Institute

Full Text of Public Comment:

To the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, and Federal Deposit Insurance Corporation (“the agencies”):

The homeownership gap between Black and white Americans is now larger than it was fifty years ago and will only continue to grow if immediate action is not taken.

That’s why we’re encouraged by the recent proposal from the agencies to amend the regulations implementing the Community Reinvestment Act of 1977 (CRA), including updates to how and which CRA activities qualify for consideration, and how they are evaluated and inform bank ratings.

Updating the CRA regulations to prioritize communities of color in addition to holding banks accountable for climate disaster and environmental harms will help ensure that the most vulnerable communities have the tools they need to be kept safe from the worsening climate crisis.  

Redlining prevented investments in areas that were occupied primarily by Black communities and communities of color – areas that were already more susceptible to environmental hazards, such as flooding. As these communities were unable to secure the financing they needed for home repair, green spaces, drainage systems, and other measures needed to respond to environmental and climate-induced harms, they suffered health and financial challenges.

The consequences of our legacy of environmental racism and redlining are clear. Today, many Black Americans live in areas that are the most vulnerable to climate extremes and environmental hazards. For example, in two-thirds of states minority neighborhoods shoulder more undisclosed flood risk than the state average. And urban heat islands tend to correlate with areas of cities that have been historically redlined and not invested in. Residents of formerly redlined neighborhoods are at increased risk of health issues like preterm birth, cancer, tuberculosis, and maternal depression.

Redlining has had and continues to have known and direct financial harm on Black people and communities of color. We strongly encourage regulators to explicitly use race as a metric in order to ensure that historically and current redlined communities receive improved access to credit and services, including investments in community climate resilience.

Additional recommendations that we encourage regulators to consider include:

  • Expand the list of climate-related eligible activities under the CRA to include activities such as electrification and water efficiency measures for residential homes, including multifamily properties.

  • Encourage banks to increase community engagement and relationship building with climate and environmental justice organizations, including through the use of Community Benefits Agreements (CBAs).

  • Consider impacts from bank activities that further contribute to climate change and disproportionately impair access to credit for Black communities.

We urge the agencies to strengthen the proposal to better ensure that the communities most impacted by redlining and environmental injustice receive the intended benefits of the CRA, and for the agencies to further consider climate-related investment opportunities for communities.

Sincerely,