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Not Only to Lend, But Lend Fairly: Neither Alone Is Enough, in the U.S., France or Elsewhere
Not Only to Lend, But Lend Fairly: Neither Alone Is Enough, in the U.S., France or Elsewhere

That banks should have a duty to serve the credit needs of poor people is the foundation of the U.S. Community Reinvestment Act, now nearly 30 years old. In the past decade it's become clear that an extra adjective is needed: FAIR credit. Banks and their affiliates have been increasingly willing to lend in poor neighborhoods of color: most often with their second-rate, high cost subsidiaries with slightly different names. Citibank, for example, has a skeleton in its closet: the high cost CitiFinancial. In 2004, after grassroots groups in NCRC showed the Federal Reserve the tricks of CitiFinancial, the company was required to pay of fine of $70 million dollars. Lending is not enough: the poor, like others, need fair credit.

This additional insight is absent from a recent article in LaSer Cofinoga's magazine Audience, "Is the U.S. a Banking Model for France's Suburbs?" The author answer yes, without explaining how CRA in the U.S. is complemented by anti-predatory lending laws. Also, the article doesn't explain how CRA is enforced: by community groups' comments on banks' merger applications. Such public participation should be a model, for France and other banking merger hotspots. But the focus cannot be simply that the banks must lend more. They must lend more fairly. Neither principle by itself can help the working poor.

Matthew Lee, Esq. Executive Director
Inner City Press / Fair Finance Watch
NCRC board member; NCRC blog =
USA Tel: 718-716-3540 E: MLee [at]

The LaSer Cofinoga article is at

ID: 37726
Author(s): NCRC - Matthew Lee
Publication date: 29/06/06

Created: 29/06/06. Last changed: 03/07/06.
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