Bank reform hits poor hardest


Comedian Bob Hope once said that a bank is a place that will lend you money if you prove that you don't need it.

Members of Congress who are behind the effort to gut the Community Reinvestment Act, while overhauling the banking system, are saying precisely the same thing.

Hope's line is a joke; the anti-Reinvestment Act campaign isn't one for low-income neighborhoods.

The act is the law that requires banks to make credit -- mainly in the form of home and small-business loans -- available to low-income neighborhoods. It helps to revitalize inner-city neighborhoods because it spurs banks to lend money to the working poor who want to own their own homes. Home ownership gives people a stake in the future of their neighborhoods.

Changes in the act were proposed by Rep. Paul E. Kanjorski, D-Pa., as amendments to the bank-reform legislation under discussion by the House Banking Committee.

Those amendments exempted smaller banks from the act and loosened requirements on larger banks. The avenues open to community groups to challenge banks based on their records of community reinvestment also were narrowed.

These proposals attempt to reduce banks' accountability under the guise of increasing their competitiveness.

As bank-reform legislation makes its way through Congress, senators and representatives should protect the Community Reinvestment Act's role as a potent tool for maintaining the health of low-income neighborhoods.

Keeping the act won't kill a bank; removing it could kill a neighborhood.

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