Put CRA revisions on hold, impact investors say

Proposed changes to Community Reinvestment Act regulations should be put on hold to avoid harming the low- and moderate-income communities they are intended to help, the Presidents' Council on Impact Investing said Thursday.

The philanthropic leadership group affiliated with the U.S. Impact Investing Alliance, with a combined $80 billion in assets, said in a comment letter the changes would significantly reduce lending and investments into low-income communities.

The proposed regulations were released Dec. 12 by two of the three agencies overseeing CRA regulation: the Office of the Comptroller of the Currency and Federal Deposit Investment Corp. The third agency, the Federal Reserve, did not participate in the proposal, which seeks to modernize the 25-year-old rules to increase lending activity in low- and moderate-income communities. The comment period ends April 8.

"The COVID-19 pandemic and the threat of a prolonged recession or even depression will inflict long-lasting damage on our most vulnerable communities, even in a best-case scenario where we can restrain the virus' spread. Leaders and institutions are rightfully looking to marshal every available resource to aid our collective response. We must move decisively to keep people in their homes, protect the well-being of those most vulnerable, and prepare businesses to reopen when possible," the letter said.

The group said that some reform is needed but the current proposals were rushed. "If the current reform process continues without delay, every investment that we make and every community partner we support will be thrown into uncertainty at a time when clear and decisive action is imperative."

The U.S. Impact Investing Alliance's mission is raising awareness of impact investing in the United States, fostering deployment of impact capital.