Why is Predatory Lending a CRA Issue?
The Community Reinvestment Act (CRA) of 1976 allows community groups to hold banks accountable for their lending to minority and low wealth neighborhoods. CRA-regulated banks are subject to a high level of federal regulatory oversight and accountability for their lending practices. Some banks covered by CRA own subsidiaries that target the subprime market. For example, Bank of America is the largest subprime lender in the country. Wells Fargo owns three subprime lenders: Norwest, Fidelity Financial and Community Credit Co. Some own credit insurance companies. Yet federal regulators do not investigate whether these subsidiaries comply with consumer laws. Independent finance companies that are not banks do not have regular consumer compliance reviews. Thus a two-tier system has evolved, consisting of regulated and unregulated lending. Why is Predatory Lending a Fair Housing Issue? Predatory lenders who discriminate get some scrutiny under the Fair Housing Act of 1968. The law requires eq
