At the same time, these banks are closing branches in low-income neighborhoods while opening branches in more affluent neighborhoods nearby. And, they are increasing fees, charges and minimum balance requirements for accounts which disproportionately affect Americans of modest means.
Two of the primary contributors to the financial crisis of 2008 were imprudent bank lending and lax regulatory supervision. The crisis cost millions of Americans their jobs, their homes and their life savings.
Awarding "satisfactory" and "outstanding" CRA ratings to the banks at the heart of the crisis adds insult to injury to these Americans. And these positive ratings virtually guarantee that the questionable activities for which major banks are paying billions of dollars in fines and legal settlements will continue.
By downgrading the CRA rating of JPMorgan Chase, the OCC demonstrated it is capable of holding a major bank accountable for a deplorable record of serving the credit needs of low- and moderate-income communities. But, the process must be applied to other major lenders to generate a sustained positive impact on financial lives of the country's most vulnerable citizens.
Jim Wells is President of Wellspring Consulting International, a Florida-based consultancy committed to expanding access to financial services for non-traditional consumers who do not use traditional financial institutions.