Huffington Post Op-Ed on the Community Reinvestment Act
A recent op-ed by Mark Pinsky, President and CEO of Opportunity Finance Network, examines the Community Reinvestment Act’s (CRA) declining influence. Enacted by Congress in 1977, the CRA encouraged banks to reinvest in the communities they serve and was intended to address years of redlining, a federally-backed practice which isolated communities of color in the credit market — making it nearly impossible to receive mortgages on homes in African-American neighborhoods.
But the rise of predatory mortgage lending that led to the Great Recession is, according to Pinsky, evidence of CRA’s shortcomings. “Too many banks turned to non-bank lenders that were not accountable under CRA to make mortgage loans that they knew, or should have known, were not going to be repaid,” he writes.
In the aftermath of the financial crisis, Pinsky looks to the future on how to best acknowledge CRA’s current limitations, and pave the way for high-impact investments to flourish in disinvested communities — particularly those with large African-American and Latino populations.