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Community lenders and advocates urge Federal Reserve to preserve 2023 CRA protections and exam transparency
Summary
Representatives of CDFIs, minority business groups and housing advocates told a Federal Reserve outreach session that rolling back the 2023 Community Reinvestment Act rules would reduce access to capital for low‑income, rural and minority communities and urged clearer exam standards and parity for CDFI investments.
Public commenters at a Federal Reserve outreach session on the Economic Growth and Regulatory Paperwork Reduction Act urged regulators to preserve the 2023 Community Reinvestment Act (CRA) rules, strengthen exam transparency, and protect access to capital for minority‑ and low‑income communities.
The session featured remarks from community development lenders, minority‑business organizations and consumer advocates who said CRA incentives are essential to directing private capital into underserved neighborhoods. Donald Cravens Jr., president and CEO of the National Minority Supplier Development Council, cited NMSDC data, saying, “NMSDC certified MBEs generate nearly $600 billion in economic output, support more than 2.2 million jobs, and deliver $168 billion in wages,” and urged regulators to maintain incentives and transparency that support lending to minority‑owned firms.
Why it matters: Commenters said the proposed rollbacks would not just reduce paperwork but risk weakening the systems that channel bank capital into affordable housing, small business loans and community development financing. Marisa Calderon, president and CEO of Prosperity Now, told the panel that fragmented reporting across statutes makes it difficult to measure outcomes, noting that “mortgage lenders today report more than 100 data fields per loan under the Home Mortgage Disclosure Act, while CRA reporting requires separate and differently structured data collection,” and recommended greater alignment of data and measurement.
Speakers representing CDFIs and nonprofit coalitions described concrete project and impact numbers to show CRA leverage. Suzy Han, vice president of regulatory affairs at Opportunity Finance Network, said OFN members have originated roughly $111 billion in financing and that 46% of CDFI capital stacks in their survey came from banks. Peter Hanley, executive director of CASA of Oregon, said Oregon has received about $819 million in CRA investments since 2010, while Will Gonzalez of SEBA highlighted LIHTC and bank participation in affordable housing.
Several speakers called for clearer and more consistent exam practices. Linda Ezuoke, founder of CRA Hub, recommended that regulators provide written summaries of activities not approved during CRA examinations to reduce inconsistent outcomes across similarly situated banks. Joan Broadhead of Finanta highlighted delays in CDFI certification after staff layoffs at the CDFI Fund and asked for guidance so banks can still receive CRA consideration while certifications are pending.
Contentious concerns about Federal Reserve transparency and merger review also surfaced. Matthew Lee of Fair Finance Watch alleged that Reserve Banks and the Board have reduced public notice for branch and merger applications and sometimes avoid substantive public scrutiny; he said this practice can limit CRA consideration during mergers and acquisitions. Lee cited recent high‑profile transactions as examples and urged the Fed to reverse policies that he said risk conflict‑of‑interest and reduced public accountability.
Other topics included appraisal reform and consumer protections. Thaddeus Dawson, president and founder of 10KBA and the 10,000 Appraisers Foundation, urged codifying reconsideration of value and described the Appraisal Foundation as ineffective, saying the VA’s reconsideration process offers a model. Sheila Collins of Girlfriends Who Inspire Change urged CRA measures to focus on outcomes—not just loan counts—and called for protections around small‑dollar products and alternative reporting structures to prevent harmful credit reporting outcomes.
Many commenters said the 2023 CRA updates better reflect modern banking, including nonbranch delivery and climate‑related community investments. Erica Plascencia of the Greenlining Institute argued the updates expanded recognition of climate resilience and community development activities and warned that branch closures and industry consolidation have disproportionately affected communities of color.
The session closed with the moderator thanking participants and staff and assuring attendees that public comments would be considered as the agencies proceed with the EGRPRA review.
