February 20, 2002
In July of 2001, before the Financial Services Committee, Chairman Greenspan stated that the CRA rating system was an effective method for influencing greater lending to underserved minorities in response to Congresswoman Lee’s questions about the lack of home lending to African Americans and Latinos.
"For many people, home ownership is the only way of acquiring equity and achieving the American dream. We must do all we can to increase minority homeownership," said Lee. "Banks have a responsibility to serve their communities, and that includes providing home loans to minorities."
At the request of Congresswoman Lee, the Greenlining Institute, a group of business, religious and civic leaders in the African American, Latino and Asian Community, analyzed data on home lending provided by the Federal Reserve Board. They found that an overwhelming percentage of major banks in California (with $10 billion or more in assets) receive "outstanding" CRA lending grades despite making less that 3 percent of their conventional homes loans to African Americans. There was no significant difference in lending patterns to Latinos.
"An institution that makes such a small percentage of its conventional home loans to African Americans is not doing an outstanding job," said Lee. "It is a disservice to the federal regulators, the banking industry, and 90 million minorities in the United States to reward institutions with inadequate lending patterns."
Congresswoman Lee will question Chairman Greenspan about CRA ratings and what can be done to increase minority homeownership when he appears before the Financial Services Committee on February 27, 2002.
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Congresswoman Lee Questions Federal Reserve Board Chairman on Accuracy of CRA Ratings System
Washington, DC – Congresswoman Barbara Lee today sent a letter to Chairman of the Federal Reserve Board Alan Greenspan questioning the effectiveness of the Community Reinvestment Act (CRA) rating system and requesting a meeting within 30 days by the four primary regulators, the Secretary of the Treasury and the President’s chief economic advisor, to discuss efforts to promote greater minority home ownership and to seek parity with white home ownership (presently 72 percent) within ten years.In July of 2001, before the Financial Services Committee, Chairman Greenspan stated that the CRA rating system was an effective method for influencing greater lending to underserved minorities in response to Congresswoman Lee’s questions about the lack of home lending to African Americans and Latinos.
"For many people, home ownership is the only way of acquiring equity and achieving the American dream. We must do all we can to increase minority homeownership," said Lee. "Banks have a responsibility to serve their communities, and that includes providing home loans to minorities."
At the request of Congresswoman Lee, the Greenlining Institute, a group of business, religious and civic leaders in the African American, Latino and Asian Community, analyzed data on home lending provided by the Federal Reserve Board. They found that an overwhelming percentage of major banks in California (with $10 billion or more in assets) receive "outstanding" CRA lending grades despite making less that 3 percent of their conventional homes loans to African Americans. There was no significant difference in lending patterns to Latinos.
"An institution that makes such a small percentage of its conventional home loans to African Americans is not doing an outstanding job," said Lee. "It is a disservice to the federal regulators, the banking industry, and 90 million minorities in the United States to reward institutions with inadequate lending patterns."
Congresswoman Lee will question Chairman Greenspan about CRA ratings and what can be done to increase minority homeownership when he appears before the Financial Services Committee on February 27, 2002.
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