MAHA Executive Director Testifies Regarding the Community Reinvestment Act

On May 4th, Tom Callahan, Executive Director of the Massachusetts Affordable Housing Alliance (an MACDC associate member) testified at a Federal Reserve hearing discussing unnecessary or burdensome regulations for insured depository institutions. The focus of his presentation was on the importance of the Community Reinvestment Act (CRA) and how its rules should be strengthened in response to changes in the financial services industry. In order to keep pace with changes in the banking industry, Tom testified that a bank’s CRA service area should be based on where it does business – not just on where it has branches. A pointed example highlighted in the presentation was Wells Fargo, which is the third largest mortgage lender in Massachusetts, even though they do not have any branches in the Commonwealth – and therefore no CRA obligations in the Commonwealth. Tom also noted that CRA grade inflation has also weakened the impact of this important law.