Recently, the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (FRB), and the Federal Deposit Insurance Corporation (FDIC) released a joint final rule modernizing the Community Reinvestment Act (CRA). CRA was enacted in 1977 to address persistent systemic inequities in our financial system, such as redlining, that exclude low income and communities of color from the resources needed to build assets. For banking institutions insured by FDIC, CRA mandates these institutions be evaluated by Federal banking agencies to determine if the bank offers credit in a way that is safe and sound while also consistent across all communities where they do business.

Since its inception, the CRA has been critical for ensuring banking institutions meet the credit needs of low-to-moderate income (LMI) people in the communities it serves. And since the announcement of this final rule, there have been a plethora of meetings, webinars, and discussion about how banks may best implement these updates. The common theme in these gatherings are the challenges with implementing the new rule, as well as which nonprofit organizations and/or programs they can support to meet the updated CRA guidelines. However, one very important question hasn’t been raised in these settings: What did the community say about what banks should do to follow the regulations?

In these recent meetings on CRA, not once have I heard statements like “the community said” or “the community wants” about how to best meet their credit needs. It raises questions about what banks have done all this time to fulfill CRA and concerns that what they’re doing is not redressing past harmful practices like redlining, which still impacts urban communities like the Southside and West End of Providence to this day. Even with hosting financial literacy workshops and sponsoring initiatives that appear on the surface to fulfill CRA, our communities find themselves having to “fit” into what the banks deemed to meet the needs rather than take the time to ask the community and then create products and services that meet what the community has said. If the banks can’t speak to what the community has said as their credit needs, then how will they know if they’re meeting the goal of CRA?

This lack of focus on what the community has said to be their credit needs raises concerns about how regulators are measuring banks to determine if they’re meeting CRA. Although key components in determining success, a community’s credit needs are more than just lending to buy homes or start a business. Simply collecting information on data such as how many loan applications from persons who live in a certain area, by itself, is not a reliable indicator that the credit needs are being met. Regulators must remember that other factors beyond a bank’s control also impact if and how the community’s needs with credit are being met and find ways to incorporate collecting data on those factors in its assessment. The process of evaluating CRA can no longer be one dimensional: it must be multi-faceted and consider all things that contribute to the success of CRA.

Whichever way is decided in following the new CRA rule, the thoughts and opinions of the community must be at the forefront of the implementation to meet their credit needs!

Dwayne Keys is long-time resident of Providence, a financial services & nonprofit professional who is active in the city’s Southside community and an advocate for economic justice.