LEVERAGING THE COMMUNITY REINVESTMENT ACT
Homeowners are the backbone of Cincinnati’s neighborhoods. Communities with high homeownership rates tend to have less crime, a stronger economy and more pride. When someone owns a home, he or she is making an investment, and therefore has an interest in seeing that investment flourish. Home ownership helps revitalize neighborhoods.
However, city government will not be able to revitalize neighborhoods without a lot of help from our local financial institutions. Utilizing the Community Investment Act will assure that happens. The Community Reinvestment Act, (or CRA) was passed in 1977 by the federal government and then renewed in 1995. It prohibits discrimination by banks on a geographic, neighborhood, or race basis. It also encourages lending to underserved populations (such as inner city residents).
The CRA helps the City of Cincinnati leverage private investment from our banks. I wrote a motion on March 9, 2005 to follow the recommendations of Cincinnati’s Committee on Reinvestment and study the lending performance of the major banks in our area. Cincinnati has fallen behind our peer cities in the last decade in leveraging private investment through the CRA. Using the Committee’s findings however, we will be able to take fuller advantage of what the CRA has to offer. In the 1990s, Cleveland went from 37th to 1st in housing production because of their use of the CRA.
Other benefits of using the CRA include driving down high levels of predatory leasing. This is because increasing the amount of capital available through traditional banking institutions will reduce the need for underserved populations to seek loans from less reputable lenders. It also provides the opportunity for inner city residents and businesses to compete successfully with their counterparts in the larger metro area. It provides the opportunity to increase housing production and renovation, which is demonstrated by what has happened in Cleveland. By leveraging the CRA we can potentially give people who have many outstanding high interest loans the opportunity to consolidate their debt at low interest rates. This will help ease the financial debt of inner city residents.
I have always believed that our neighborhoods are the strength of our community, and I have demonstrated that during my time on City Council with my Crime Plan, establishment of a Neighborhood Business District support Fund, crackdown on predatory leasing, and my establishment of a one-stop housing center. The CRA is a very powerful tool to increase homeownership. This will continue to ensure that our neighborhoods remain Cincinnati’s strong point of pride.
However, city government will not be able to revitalize neighborhoods without a lot of help from our local financial institutions. Utilizing the Community Investment Act will assure that happens. The Community Reinvestment Act, (or CRA) was passed in 1977 by the federal government and then renewed in 1995. It prohibits discrimination by banks on a geographic, neighborhood, or race basis. It also encourages lending to underserved populations (such as inner city residents).
The CRA helps the City of Cincinnati leverage private investment from our banks. I wrote a motion on March 9, 2005 to follow the recommendations of Cincinnati’s Committee on Reinvestment and study the lending performance of the major banks in our area. Cincinnati has fallen behind our peer cities in the last decade in leveraging private investment through the CRA. Using the Committee’s findings however, we will be able to take fuller advantage of what the CRA has to offer. In the 1990s, Cleveland went from 37th to 1st in housing production because of their use of the CRA.
Other benefits of using the CRA include driving down high levels of predatory leasing. This is because increasing the amount of capital available through traditional banking institutions will reduce the need for underserved populations to seek loans from less reputable lenders. It also provides the opportunity for inner city residents and businesses to compete successfully with their counterparts in the larger metro area. It provides the opportunity to increase housing production and renovation, which is demonstrated by what has happened in Cleveland. By leveraging the CRA we can potentially give people who have many outstanding high interest loans the opportunity to consolidate their debt at low interest rates. This will help ease the financial debt of inner city residents.
I have always believed that our neighborhoods are the strength of our community, and I have demonstrated that during my time on City Council with my Crime Plan, establishment of a Neighborhood Business District support Fund, crackdown on predatory leasing, and my establishment of a one-stop housing center. The CRA is a very powerful tool to increase homeownership. This will continue to ensure that our neighborhoods remain Cincinnati’s strong point of pride.
