Bill Overview
Title: Making Communities Stronger through the Community Reinvestment Act
Description: This bill revises the Community Reinvestment Act, which addresses the availability of credit in communities. Under the act, financial regulators examine a banking institution's community activities such as lending, investments, and services, particularly for low- and moderate-income populations. Specifically, the bill sets forth examination requirements regarding an institution's illegal or discriminatory activity, partnerships with non-depository lenders, home mortgage lending targeted to low- and moderate-income borrowers, and community service or charity work. Each institution must establish Community Advisory Committees in areas served by the institution.
Sponsors: Rep. Waters, Maxine [D-CA-43]
Target Audience
Population: Individuals in low- and moderate-income populations globally
Estimated Size: 66000000
- The bill impacts how banking institutions operate within communities, focusing on low- and moderate-income populations.
- Improving access to credit and financial services can directly impact individuals in these income brackets by facilitating home ownership, business opportunities, and financial stability.
- The establishment of Community Advisory Committees aims to increase accountability and ensure community needs are addressed, further directly influencing these populations.
- The population directly impacted consists of individuals residing in areas served by institutions adhering to these revised guidelines.
Reasoning
- The policy targets low- and moderate-income populations in the US, focusing on providing them with better access to financial credit services.
- With the specified budget, it is likely to affect people differently depending on their current access to banking services and financial needs.
- Some individuals may see a significant impact on their wellbeing with improved credit access and community service initiatives, while others may see minimal changes if they are already financially stable or reside in areas less serviced by targeted banking institutions.
- To cover this diversity, this simulation includes people from various demographics, occupations, and parts of the country.
- The program's community advisory committees underscore an effort towards inclusivity and ensuring local needs are met, potentially elevating the wellbeing of community members over time.
Simulated Interviews
Factory Worker (Cleveland, OH)
Age: 45 | Gender: female
Wellbeing Before Policy: 3
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- I really struggle with finances, and usually can't get loans because of my credit score.
- If this program means I can finally get a mortgage or consolidate my debts, that would be incredible.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 3 |
| Year 2 | 5 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 7 | 3 |
| Year 10 | 8 | 3 |
| Year 20 | 8 | 3 |
Freelance Graphic Designer (Austin, TX)
Age: 28 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- Any help with getting better rates on a business loan would help me expand my freelance operation.
- Better financial support might help me focus more on my work and less on my financial struggles.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 5 |
Farmer (Rural Kansas)
Age: 35 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- If this can help farmers get better rates for farm improvements or expansion, it would be beneficial.
- We often feel overlooked by banks and this could change that.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Retired (Seattle, WA)
Age: 60 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 9/20
Statement of Opinion:
- I think this policy is good for the younger generation who are struggling more financially.
- For me, the impact may be limited but knowing the community benefits is reassuring.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Small Business Owner (Miami, FL)
Age: 50 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- Improved loan access could help expand my business and create more jobs.
- Community services should mean more local spending and growth.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
Nonprofit Worker (Brooklyn, NY)
Age: 24 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- More mortgage options might help those we serve find permanent housing solutions.
- This aligns with the work we do but directly improves individual credit access.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
Auto Plant Worker (Detroit, MI)
Age: 42 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- This could finally allow me to save for the future and not just get by.
- I hope it addresses income and racial disparities in banking services.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 8 | 4 |
| Year 20 | 9 | 4 |
Student (Los Angeles, CA)
Age: 18 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 11/20
Statement of Opinion:
- More equitable financial services could help fund my education.
- My parents might benefit from improved access to home loans.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
IT Specialist (Chicago, IL)
Age: 32 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 13/20
Statement of Opinion:
- I think these revisions could really lift the community, though for me personally, the impact is less direct.
- Helping others means a better living environment for all.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
High School Teacher (New Orleans, LA)
Age: 30 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- Access to affordable housing could mean a world of difference for my students' families.
- It's great to see a focus on community services.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Cost Estimates
Year 1: $300000000 (Low: $200000000, High: $500000000)
Year 2: $250000000 (Low: $150000000, High: $400000000)
Year 3: $200000000 (Low: $100000000, High: $350000000)
Year 5: $150000000 (Low: $75000000, High: $300000000)
Year 10: $100000000 (Low: $50000000, High: $250000000)
Year 100: $50000000 (Low: $20000000, High: $100000000)
Key Considerations
- The efficacy of new examination requirements will depend on how stringently financial regulators enforce them.
- Community Advisory Committees' effectiveness will vary based on how actively communities engage and participate.
- Potential resistance from financial institutions due to increased administrative burden and compliance costs.
- Possible overlap with existing requirements and regulations that might dilute the specific impact of this bill's provisions.