Does CRA Still Matter? Does The Community Reinvestment Act Still Matter?
HOLLYWOOD, Calif.-Does the Community Reinvestment Act still matter?
Not like it used to, according to two people, who stressed that CRA nonetheless remains important.
Jennifer Tescher, president and CEO of the Center for Financial Services Innovation in Chicago, and Mark Pinsky, president and CEO of Philadelphia-based Opportunity Finance Network. Noted during a panel on the future of the CDFI movement and innovation in banking at the National Federation of Community Development Credit Unions' recent annual conference here that there remain elements within financial services where CRA is relevant.
"CRA is not going away," said Pinsky. "It matters because it still motivates a certain set of financial institutions."
The financial services sector is "waiting and waiting" on new CRA rules, he added.
Tescher said she has been "heartened" by recent conversations relating to CRA modernization. "This brings more awareness of the importance of diversification," she assessed.
Pinsky said "somehow, someone" has to figure out a way to serve low-income communities across the country, whether by government mandate or sound business sense.
"CDFIs are the last ones standing, so they will have to lead the way," he said. "The CDFI program probably has more bang for the buck than any other federal program."
According to Tescher, regulations and certification are credit unions' "best friends" in today's financial services landscape, even though it does not feel that way.
"The marketplace and consumers will reward those who are trusted. People are looking for identifiers of quality."
Pinsky advised CDFIs they have both a responsibility and an opportunity today. He said they must continue to take advantage of technology to play the biggest role possible.
"Don't try to do everything, but do the right things and do them well," he counseled.
To Tescher, the notion of the "underserved consumer" has changed greatly over the past five years.
"There are more people being labeled 'underserved' today, but the public is realizing these are not deadbeats. They are families that are really hurting. The problem has never been bigger and the opportunity has never been bigger-and financial services providers have to be responsive."