Lael Brainard: Modernizing and strengthening CRA regulations - a conversation with the housing community

Speech by Ms Lael Brainard, Member of the Board of Governors of the Federal Reserve System, at the National Housing Conference National Advisory Council Meeting, 20 October 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

I want to thank David Dworkin for inviting me to participate in this discussion. I am pleased to be with you to talk about Community Reinvestment Act (CRA) modernization and how this process can help address the housing challenges facing minority and low- and moderate-income (LMI) communities around the country. The National Housing Conference (NHC) is an important voice in housing and community development policy, so I look forward to hearing from you.

During the mortgage foreclosure crisis, many families around the country suffered the devastating loss of their home through no fault of their own, and homeownership rates have not recovered to pre-crisis levels for the affected groups. Now, the COVID-19 pandemic is raising a new set of housing challenges for renters and the rental market. The current crisis is hitting LMI households with limited financial resources the hardest, and this is especially true for Black and Latinx households. Data from the Census Household Pulse Survey indicate that 25 percent of Black renters and 22 percent of Hispanic renters were behind on their rent payments as of September, along with 12 percent of White renters. Among homeowners, Black and Hispanic households have been "significantly more likely to miss or defer monthly mortgage payments and experience uncertainty about making next month's payment than white households" during the pandemic.