FDIC Scrutinizes Banks for Redlining Practices

WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) isn’t just insuring deposits; they’re digging into how banks are lending, and the results are now public. Today, the agency released a list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA) – a 1977 law meant to stop banks from systematically disinvesting in poor and minority neighborhoods, a practice known as redlining.

The CRA isn’t some feel-good initiative. It’s a direct response to decades of discriminatory lending practices that left entire communities starved for capital. The FDIC’s latest evaluations, covering December 2023, are a snapshot of whether banks are actually living up to the law’s intent: meeting the credit needs of all their communities, not just the wealthy ones. FIRREA, passed in 1989, mandates public disclosure of these evaluations, forcing banks to answer for their community involvement – or lack thereof.

What does this mean for the average citizen? It means a potential look under the hood of the financial institutions holding your money. Are they investing in local businesses in underserved areas? Are they offering affordable mortgages to families struggling to achieve the American Dream? The FDIC’s list, while dry reading for most, is a crucial piece of the puzzle for anyone concerned about economic justice. The agency doesn’t name names of banks failing, but it does assign ratings.

The full consolidated list of state nonmember banks evaluated since July 1990 – complete with ratings – is available. You can find it online or request a hard copy from the FDIC’s Public Information Center at 3501 Fairfax Drive, Room E-1002, Arlington, VA 22226 (877-275-3342 or 703-562-2200). Don’t expect a glossy report. These evaluations are detailed, technical documents, but they contain vital information about where the money flows – and where it doesn’t.

Individual bank CRA evaluations are also available directly from the banks themselves; they’re legally required to provide them upon request. The FDIC’s Public Information Center is another avenue for accessing these reports. LaJuan Williams-Young at the FDIC (703-470-0201) is the contact for media inquiries. While this isn’t a tale of arrests or indictments, it’s a story of accountability – and a reminder that banks, like any other institution, are subject to scrutiny.

The March 2024 List of Banks Examined for CRA Compliance and the Monthly List of Banks Examined for CRA Compliance are now publicly accessible. The FDIC last updated this information on March 4, 2024. Grimy Times will continue to follow this story, digging deeper into the ratings and uncovering any patterns of discriminatory lending practices that may be lurking beneath the surface.

RELATED: FDIC Scrutinizes Banks for Redlining Practices

RELATED: FDIC Scrutinizes Banks for Redlining Practices