WASHINGTON — A public interest coalition is calling on financial regulators to declare the drinking water contamination in Flint, Mich. a "disaster" and encourage lenders from around the nation to extend credit to the area to counteract the damage.
John Taylor, president of the National Community Reinvestment Coalition, said in a letter to the Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. Wednesday that the designation would help the area "repair and replace damaged pipes" — a cost that the city's mayor has estimated at $1.5 billion. Taylor said that some lenders will not offer home loans to the area out of concerns that the drinking water to those properties is dangerously unsafe.
"The pieces are in place for a disaster designation for Flint under the [Community Reinvestment Act]," Taylor said. "Extraordinary efforts, including a focusing of bank CRA activities, are warranted to assist residents of Flint reclaim their lives and property."
CUs Assist Flint
Some local-area credit unions have joined relief efforts to assist residents of Flint.
For example, Catholic Federal Credit Union, a $337 million institution based in Saginaw, Mich. — located about 40 miles north of Flint — donated more than 3,400 bottles of water to help students at Northridge Academy, a high school in Flint. Catholic FCU also made a separate $300 donation to Catholic Charities of Flint to help buy water that is being distributed to Flint residents daily.
Another Michigan credit union, the $456 million Kellogg Community FCU of Battle Creek, formed a partnership with local businesses to provide water to the community. The credit union also donated 7,600 bottles of water and has asked the public for additional help. (Battle Creek is 100 miles to the southwest of Flint).
"It is a tragedy that the residents of Flint do not have access to the basic need of water," said Tracy Miller, CEO of Kellogg Community. "We were proud to have worked with other local businesses to get water to Flint and we feel like we should continue to support the cause since it is going to take some time before the problem is resolved. Our goal is to provide Flint residents with 15,000 bottles of water, and with the help of our employees, members, and community."
In late January, Catholic FCU also donated more than 100 bottles of water to help students at the University of Michigan's Flint campus who were also affected by the water crisis.
"Catholic Federal is committed to living the credit union's philosophy of people helping people," said Vice President of marketing, Bethany Dutcher. "This is one small way we can help our neighbors in their time of need."
Late last year, the Michigan Credit Union League (MCUL) said that two local credit unions, Team One Credit Union (a $41-million institution based in Saginaw) and FM Financial Credit Union (a $32 million institution in Flint), also teamed up with some local businesses in both cities to donate water to benefit schools and families in the Flint area.
The whole enterprise was coordinated by The Great Lakes Bay Hispanic Leadership Institute (sponsored by Saginaw Valley State University) — in tandem with the aforementioned credit unions — to collect and distribute nearly 16,000 bottles of drinking water.
"It's just such a blessing to see the strong support that Flint residents have received from our friends in Saginaw and of course those locally. FM Financial CU is proud to partner with these great organizations and volunteers to help provide some relief for local families and children struggling to have basic access to clean water," said Carl Hawkins, board chairman of FM Financial CU.
(Team One and FM Financial have since agreed to merge.)
The crisis in Flint's water supply began in April 2014, when the city began drawing its drinking water source from the Flint River to cut costs. The city had been served by the greater Detroit water system up to that time. In the fall of 2015 reports began emerging that Flint's drinking water contained levels of lead that were orders of magnitude higher than the maximum levels allowed by law. Lead is a potent neurotoxin that can cause severe developmental disabilities in children.
The Federal Emergency Management Agency declared the Flint water crisis a federal emergency in January, which NCRC said enables the banking agencies to declare an emergency as well.
The agencies had declared a similar emergency in the wake of Hurricane Katrina. Under the CRA, agencies can waive certain requirements in a disaster situation, namely by allowing banks that are not located in a disaster area to lend or invest in repairing damage and acquire CRA credit for those activities.
— Palash R. Ghosh contributed to this article.
