WASHINGTON — A public interest coalition is calling on bank regulators to declare the drinking water contamination in Flint, Mich., a "disaster" and encourage lenders from around the country to extend credit to the area in order 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 CRA," Taylor said, referring to the Community Reinvestment Act. "Extraordinary efforts, including a focusing of bank CRA activities, are warranted to assist residents of Flint reclaim their lives and property."

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; the NCRC said that 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 in a disaster area to lend or invest in repairing damage and acquire CRA credit for those activities.

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