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Senate of Pennsylvania
Session of 2023 - 2024 Regular Session


Posted: January 10, 2023 10:08 AM
From: Senator Vincent J. Hughes
To: All Senate members
Subject: Establishing a Pennsylvania Community Reinvestment Act
In the near future, I will be reintroducing my legislation, Senate Bill 460, which establishes the Pennsylvania Community Reinvestment Act. The intent of this bill is to provide additional protections in the residential mortgage market.

In 1977, Congress passed the Community Reinvestment Act (CRA) to end redlining, assist low income communities of color achieve the American dream of homeownership, and infuse a sense of fairness in home lending. Unfortunately, the CRA did little to ensure that banks and other financial institutions made home mortgages available to qualified applicants regardless of race. Since the enactment of the CRA, several states, including Massachusetts, New York, and Connecticut have enacted their own state version of the CRA. My legislation would add Pennsylvania to this list.

In the past few years, there have been disturbing allegations of racial disparities in the home lending market uncovered by the Center for Investigative Reporting (CIR). The CIR study indicated that in the City of Philadelphia, banks are two and a half times more likely to deny a black mortgage applicant than a white applicant with a comparable income. More recently, the National Community Reinvestment Coalition (NRC) released their report “Redlined” KeyBank Failed Black America Despite Its Commitments to Improve” which uncovered more troubling trends from 2018 to 2021 in lending (or lack of lending) to black home buyers by KeyBank in the Philadelphia region. Despite these disparities, the federal government has continually found ninety-nine percent of banks to be in compliance with the CRA.

My legislation would establish the Pennsylvania Community Reinvestment Act to provide additional safeguards in the residential mortgage market. The bill would mirror much of the federal CRA but provide additional safeguards to root out racial disparities in lending practices. Specifically, my legislation would require banks demonstrate that race plays no factor in their lending decisions. These disclosures would be public information and provide an additional factor in determining a bank’s compliance with the Pennsylvania Community Reinvestment Act.

Please join me in cosponsoring this important piece of legislation. If you have any questions, please contact Michael Deery in my office at Michael.Deery@pasenate.com or 717-787-7112.

Introduced as SB498