CACLV exec to testify at federal banking hearing

The Executive Director of the Community Action Committee of the Lehigh Valley will present comments on how community reinvestment rules could be improved to make credit more accessible to small businesses, especially in low- to moderate-income communities, at a national hearing in Los Angeles, California, on Tuesday, August 17. The hearing is being conducted jointly by the four federal regulatory agencies: the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision.
Alan L Jennings, Executive Director of the Community Action Committee of the Lehigh Valley, is a long time advocate for access to credit for low-income families and their neighborhoods. His testimony in Los Angeles will address issues like collection and disclosure of small business lending data by race and census tract, opportunities for the public to be better informed about and comment on bank plans to merge or close branches, stronger rules related to the even distribution of branches (where most small business lending is done) throughout communities, not just in upper-income census tracts, and better consistency in rule interpretation among and within the regulatory agencies.
In commenting generally about the importance of so-called federal “community reinvestment” requirements, Jennings will tell the regulators, “In an era when capital is increasingly a consolidated, centralized and global commodity, with decisions more standardized as well as distant from the community where it is needed, the Community Reinvestment Act is the antidote, localizing credit and fueling a community’s economic vitality and, therefore, its quality of life.”
Jennings will also comment on how regulators have over-compensated for the risky lending practices by irresponsible, mostly non-bank lenders by mistakenly confusing threats to safety and soundness with community reinvestment lending: “Regulators have contributed to the credit crunch by contributing to the idea that lending in lower-income communities is not safe and sound. The frustration of community development professionals is that community development lending is safe and sound and none of us intend it any other way.”
CACLV has a long history of community-based economic development and asset-building through such initiatives as entrepreneurial training and technical assistance (conducted by its subsidiaries, the Community Action Development Corporation of Allentown and CADC Bethlehem) and lending to microenterprises by a third subsidiary, The Rising Tide Community Loan Fund. It operates comprehensive neighborhood development partnerships in all three cities. The agency has also facilitated “community reinvestment commitments” between local community, housing and economic development organizations and merging banks that have totaled hundreds of millions of dollars in investments and loans.