The Community Reinvestment Act (CRA) has reshaped how banks provide financial services to low- and moderate-income neighborhoods. The history and impact of this groundbreaking legislation is laid out in a External Linkcompelling new graphic timeline. External LinkFed Communities has published the timeline and other articles about the CRA as bank regulators seek to modernize the legislation. (Before Aug. 5, you can External Linksubmit a comment on the proposed new rules.)
The timeline explains the historical conditions, such as discriminatory government and banking industry practices, that were the catalysts for federal action. It explains government efforts leading up to the CRA, and what the CRA – signed in 1977 by President Jimmy Carter – was intended to accomplish. From there, it covers the addition of community development teams to Federal Reserve Banks, and evidence of the CRA’s impact over time.
The timeline is the latest in the “External LinkCRA: Building Blocks for Change” series on Fed Communities, the website that shares the Fed’s work in lower income communities nationwide. Other stories show the CRA in action with groups like Wealth Watchers Inc., in Jacksonville, Florida, and TulsaWorks Career Academy in Tulsa, Oklahoma. Other stories show how Community Development Financial Institutions helped small businesses stay afloat at the start of the COVID-19 pandemic. It also includes posts detailing where the CRA has fallen short by failing to deliver to some communities, and what’s next as financial regulators work to modernize the CRA.
Find your own city's redlining maps
The External LinkDenver map, above, is from External LinkMapping Inequality. The website offers interactive maps showing how the federal government’s Home Owners’ Loan Corp. (HOLC) described many cities between 1935 and 1940. Neighborhoods that received an A grade are green and considered safe investments. Neighborhoods with a D grade, colored red, are considered hazardous. On the site, if you click on the neighborhood it shows a more detailed description.
“HOLC created area descriptions to help organize the data they used to assign the grades,” according to the External LinkMapping Inequality website. “Among that information was the neighborhood's quality of housing, the recent history of sale and rent values, and, crucially, the racial and ethnic identity and class of residents that served as the basis of the neighborhood's grade. These maps and their accompanying documentation helped set the rules for nearly a century of real estate practice.”
When HOLC regulators analyzed Denver’s neighborhoods, the ratings were:
Grade A, “best” 7%
Grade B, “still desirable” 15%
Grade C, “definitely declining” 47%
Grade D, “hazardous” 31%
Robert K. Nelson, LaDale Winling, Richard Marciano, Nathan Connolly, et al., “Mapping Inequality,” American Panorama, ed. Robert K. Nelson and Edward L. Ayers, accessed June 7, 2022, External Linkhttps://dsl.richmond.edu/panorama/redlining/#loc=12/39.71/-105.084&city=denver-co.