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Since the passage of the Community Reinvestment Act (CRA), National People's Action has been involved in the largest number of CRA challenges and agreements throughout the country.

In addition to making CRA work for neighborhoods, neighborhood people have demanded that CRA be made more effective. This means that CRA needs to be modernized to keep pace with the changing face of our financial institutions. If changes are not made to CRA, it will continue to get harder for low and moderate communities to have access to quality home and small business loans.

NPA submitted comments in October 2001 to the four banking regulators advocating for changes to modernize CRA. NTIC based its comments on what groups have been experiencing in their neighborhoods.

Instead of seeing no loans in low and moderate-income neighborhoods, residents are now seeing an abundance of bad loans. Predatory lenders who charge outrageous interest rates and fees have targeted borrowers in low income neighborhoods. Banks have left an enormous vaccuum of good loans which have allowed predatory lenders to operate.

For example, in Chicago's largest neighborhood, Austin, subprime lenders made 49% of the loans in 2000. Fifteen of the top 25 lenders in Austin were subprime lenders.

This serves to create two tiers of lending in communities, with the people who can least afford it, paying the most for financial services.

If CRA is not modernized, it will lose its ability to hold the nation's quickly changing financial institutions accountable to the communities in which they operate and allow predatory lending to flourish. Without strong CRA regulations, predatory lending will grow and banks' commitment to communities will disappear.