Attorney General Becerra: Federal Reserve Proposal Will Reinforce Access to Banking and Credit Services for Low-Income Communities and Communities of Color

Tuesday, February 16, 2021
Contact: (916) 210-6000,

Attorney General Becerra leads coalition of 23 attorneys general in support of proposed rule to strengthen the Community Reinvestment Act 

SACRAMENTO – California Attorney General Xavier Becerra today led a coalition of 23 attorneys general in a comment letter in support of the Federal Reserve’s proposed rule to strengthen regulations under the Community Reinvestment Act (CRA). The CRA was enacted by Congress to prevent racially discriminatory redlining in housing, and encourage banks and savings associations to help meet the credit needs of all segments of their communities, including low- and moderate-income neighborhoods and individuals.

“No matter where we live, we all deserve a fair chance at getting the credit we need to buy a home or revitalize our business,” said Attorney General Becerra. “The Community Reinvestment Act helps make that happen. Good-faith endeavors to strengthen it can help make a direct difference in the lives of Californians who have been hit the hardest by this pandemic. At the California Department of Justice, we’re encouraged by the Federal Reserve’s independent efforts to help level the playing field and support working families across the country. This proposal will reinforce access to banking and credit services for all of our communities.”

Since the CRA was enacted in 1977, it has helped direct trillions of dollars in investments back to low- and moderate-income communities, increasing access to financial services and loans that incentivize the availability of affordable housing and support small businesses across the country. During the current economic and public health crisis, safeguarding and strengthening the law’s mechanisms to tackle persistent, structural inequality remains as important as ever. Compliance with the CRA is overseen by three regulatory agencies: The Federal Reserve Board of Governors, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation. On September 21, 2020, the Federal Reserve — following rulemaking by the OCC that was strongly condemned by a multistate coalition of attorneys general as antithetical to the goals of the CRA — put out a request for comments on its separate, independent proposal to strengthen, clarify, and tailor CRA regulations to reflect the current banking landscape and better meet the core purpose of the law.

In their comment letter, the multistate coalition of attorneys general applauds the Federal Reserve’s efforts and reemphasizes the CRA’s critical impacts, including on:

  • Affordable housing and preventing homelessness, with the Federal Reserve's proposal taking steps to help designate housing for very-low income, homeless, or other harder-to-serve populations as being particularly responsive for CRA evaluations;
  • Serving financial needs of low- and moderate-income communities, with the Federal Reserve’s proposal expected to keep banks accountable and responsive through community input in the evaluation process of bank activities under the CRA; and
  • Potential for increasing access to credit and deposit services for small businesses hit hard by the pandemic, with the proposal tightening the definition of small businesses and farms in order to help better meet the credit and banking services needs of residents who may have struggled to obtain relief. 

Attorney General Becerra is committed to protecting hardworking Americans and their families and ensuring access to fair and affordable housing. Last month, the Attorney General joined a lawsuit challenging an OCC regulation threatening to facilitate predatory lending schemes. Last year, Attorney General Becerra filed a comment letter in defense of antidiscrimination protections that help ensure equal and consistent access to shelters. He also intervened in a lawsuit to protect the state’s ability to address housing availability and affordability. In 2019, the Attorney General filed an amicus brief in support of the City of Oakland in a case against Wells Fargo, highlighting the state’s interest in protecting Californians against predatory lending.

In filing the comment letter, Attorney General Becerra is joined by the attorneys general of Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia.

A copy of the comment letter is available here.

# # #