Ginny Cleaveland, Deputy Press Secretary, Federal Communications, Sierra Club, ginny.cleaveland@sierraclub.org, 415-508-8498 (Pacific Time)
WASHINGTON, DC —Today, three major federal financial regulators — the Federal Reserve, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) — announced their final rule modernizing the regulations implementing the Community Reinvestment Act (CRA), a landmark civil rights law passed in 1977 in response to the banking industry’s continued failure to fairly serve low-income communities and communities of color. The central directive of the law requires banking regulators to ensure that banks provide adequate access to credit and services to all parts of a community, regardless of wealth or income.
Read the final rule: https://www.federalreserve.gov/aboutthefed/boardmeetings/files/frn-cra-20231024.pdf
Advocacy groups including the Sierra Club acknowledged positive revisions to the rule, which support investments in vulnerable communities including weatherization, energy efficiency, and community solar projects. However, regulators rejected recommendations from advocacy groups to use the regulatory framework of the CRA to assess the climate impacts of financing activities, and to discourage banks from financing high-carbon industries driving climate change and harming already vulnerable communities. In addition, regulators declined to update the rule to explicitly use race as a metric in the implementation of the CRA to ensure that historically and current redlined communities receive improved access to credit and services, including investments in community-based climate resilience.
“With this update to the Community Reinvestment Act, federal regulators have taken important steps to drive investments in climate-vulnerable communities, which could help support resilience to climate impacts. However, it is disappointing that regulators missed a key opportunity to mitigate climate risk and discourage financing for the polluting industries devastating the climate and our country’s most vulnerable communities,” said Adele Shraiman, Senior Campaign Strategist for the Sierra Club’s Fossil-Free Finance Campaign.
The final rule comes after a comment period held from May to August 2022. During the comment period, advocacy groups including the Sierra Club, Americans for Financial Reform Education Fund, Greenlining Institute, Public Citizen, and others submitted several comments, including a coalition comment letter signed by nearly 90 organizations and a Sierra Club comment letter.
Read more about the Community Reinvestment Act in this Sierra Club blog: How a civil rights-era law can protect vulnerable communities from climate change
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The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.