WASHINGTON - Two Democrats reintroduced a bill Tuesday that stalled last year to update the Community Reinvestment Act.
The bill would repeal many changes made by the Gramm-Leach-Bliley Act of 1999 and would extend CRA requirements to other financial service providers, such as securities firms and insurance companies.
The authors, Reps. Thomas M. Barrett, D-Wis., and Luis V. Gutierrez, D-Ill., say the legislation is needed to update CRA to match the increased market powers created by Gramm-Leach-Bliley, bill supporters say.
In a letter to President Bush seeking his support, the congressmen wrote: "While the GLB Act allows banks to merge with securities and insurance firms in a new holding company, it does not require that all of a holding company's banking and lending products be covered by CRA. Essentially, the law creates a two-tiered banking and lending industry, with one part being covered by CRA and the other part not."
The bill would eliminate Gramm-Leach-Bliley's "sunshine" provision, which requires banks and community groups to report details of CRA-related loans or grants. It would undo some the law's regulatory relief for small banks, requiring CRA exams to be conducted every two to three years.
The legislation would require banks to report more detailed demographic and geographic data under the Home Mortgage Disclosure Act, and would apply similar reporting requirements to insurance companies and small-business and farm lenders.
It would also combat predatory lending by reducing the CRA ratings of any financial institution or its affiliates found to be engaging in the practice.