NAAHL Highlights CRA's Critical Role in Expanding Housing Supply and Driving Economic Opportunity, Joins More Than 475 Organizations in Nationwide Letter
NAAHL's comment to the CRA proposed rule urges regulators to maintain impactful incentives for affordable housing and community development financing.
Today, the National Association of Affordable Housing Lenders (NAAHL) filed formal comments with the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) on their Community Reinvestment Act (CRA) proposed rule.
NAAHL's letter underscores the critical role that CRA plays in expanding access to homeownership, supporting small businesses, and growing our affordable housing supply. At a time when policymakers and communities across the country are focused on expanding housing supply, a clear and durable CRA framework is especially essential for banks to make significant investments and maintain local partnerships that drive impact.
“CRA is an irreplaceable policy that harnesses the power of the U.S. banking system to expand access to housing and economic opportunity,” said Sarah Brundage, NAAHL President and CEO. “Blunt changes to CRA may have unintended consequences. With any updates to CRA, we should ensure that we are enhancing the outcomes of CRA, not suppressing them.”
NAAHL supports several elements of the proposed rule that would make the CRA framework clearer, support innovation, and encourage banks to use the best financing tools for the community's need. The letter also urges the agencies to ensure that changes work together to expand incentives for affordable housing and community development in markets across the country, including rural areas and smaller towns that are too often underserved.
What the Data Shows
NAAHL's comments draw on data, including from recently released maps developed in partnership with FairPlay AI that show how changes to asset thresholds being considered by regulators would affect different parts of the country.
If the OCC and FDIC raise the asset threshold defining a small bank to $10 billion:
NAAHL's Key Recommendations:
Establish asset thresholds that support diverse, dynamic markets that meet the range of affordable housing and community development needs.
Maintain CRA's focus on lending, investment, and services that expand economic opportunity and build wealth.
Ensure local service providers, community-based organizations, and nonprofits can continue to help lenders meet local credit needs.
Maintain a CRA framework that incentivizes community development financing tailored to unique local needs in LMI communities.
Support access to affordable housing and community development financing in all communities through clear, uniform guidance.
Maintain a flexible strategic plan option that prioritizes affordable housing and community needs.
Maintain the Interagency Questions & Answers, which provides clear and well-understood guidance on CRA implementation.
Establish a thoughtful transition process.
More than 475 Organizations Elevate the Critical Role CRA Plays in Affordable Housing
NAAHL also joined more than 475 organizations, covering all 50 states, in urging the OCC and FDIC to maintain meaningful community development incentives for banks of all sizes.
The letter, with signatories representing housing lenders, industry associates, CDFIs, affordable housing developers, community-based organizations, and housing practitioners and policy leaders across the country, underscores the importance of CRA in affordable housing and community development activity.
"Dramatic drops in CRA-motivated community development activity would hurt local economies and businesses, exacerbate the affordable housing shortage, reduce local jobs, and weaken affordability for households, especially in rural communities and smaller markets, at a time when our country is focused on those very priorities," reads the letter.
The letter calls for the final rule to:
Maintain meaningful community development responsibilities for banks of all sizes.
Preserve strong expectations for community development lending and investment.
Protect grants and other support for nonprofit and community-based organizations.
Keep low- and moderate-income people and communities at the center of CRA.