The banking industry has campaigned to weaken or eliminate the Community Reinvestment Act since its enactment. Claiming the regulatory and paperwork burden is too high, banks and their lobbying trade associations have pressured Congress to roll back the requirements, at the same time contributing heavily to Congressional campaigns. The deregulatory mantra is popular with Republicans and conservative Democrats, but ACORN has fought every threat to CRA by dispelling industry myths and presenting the tangible benefits CRA provides to families and communities.

During an attack on fair housing law in 1991, ACORN members beat the industry lobbyists at their own game. With little notice, Rep. Kanjorski (D-PA) slipped an amendment onto the omnibus bank reform bill which effectively exempted the majority of banks from the CRA. It prohibited CRA evaluations of small banks and provided a safe harbor for all banks with good CRA ratings. Since 98% of all banks get satisfactory or better CRA ratings, the safe harbor provisions de facto eliminated enforcement of CRA for the bigger banks.

Though the amendment passed without serious dissent in subcommittee, a huge battle loomed in the full House Banking Committee. ACORN and its allies geared up and besieged the Committee members, making lobby visits and holding demonstrations in district offices. ACORN generated extensive local media coverage of the threat to CRA, which increased the pressure on undecided legislators.

With mark-up scheduled on the bill, hundreds of ACORN members rode buses from across the country to protest the deregulatory legislation. They arrived in the middle of the night before the hearing, ahead of the bicycle messengers industry lobbyists hire to hold their places in line. When the mark-up began, ACORN members comprised nearly the entire audience and only a few of the lobbyists were able to squeeze into the hearing room. Chairman Gonzalez congratulated ACORN for making the hearing more democratic since actual citizens were present, not just industry lobbyists. Ultimately, to ACORN’s applause, the Committee voted for Gonzalez’ amendment which nullified Kanjorski’s attempt to gut CRA.

The victory was enormous for ACORN. The loss would have been devastating, and many of ACORN’s successful tactics would have been stripped from its arsenal. The vigorous campaign, which lasted only a month, earned ACORN credit for saving the CRA.

New Threats Demand Renewed Defense

The election of the Republican 104th Congress brought a wave of deregulatory zeal which threatened decades of banking safety and community laws. Many predicted the CRA would not survive in the new pro-business environment. The introduction of HR 1858 heralded a new low for the friends of the financial industry in Congress. Rep. Bereuter’s (R-NE) package would have exempted 88% of all banks from CRA requirements, eliminated safety and soundness regulations which guard against future bailouts, gutted consumer protection laws, and prohibited community comment on bank expansions. The bill would have prevented regulators or community groups from holding banks accountable by ending requirements of HMDA and crippling CRA’s only enforcement mechanism.

When the House Banking Committee considered the bill, ACORN was there in force. Denied the right to testify on the proposed legislation, ACORN president Maude Hurd stood up when mark-up began and demanded to be heard. Subcommittee Chair Roukema (R-NJ) called the Capitol Police who took Maude and four other ACORN leaders to D.C. central booking where they were charged with disrupting Congress. Requests from Rep. Joe Kennedy and Sen. Edward Kennedy to release the ACORN activists failed, and it was not until Rep. Maxine Waters (D-CA) showed up at the jail and refused to leave that they were released late that night. Meanwhile, as mark-up continued in subcommittee, ACORN members again displaced the industry lobbyists who were forced to watch the proceedings on closed circuit television. When the full Committee took up the measure ACORN supplanted the lobbyists once more, this time packing the overflow room as well, leaving many lobbyists in the hallways.

Despite ACORN’s extensive pressure, the House Banking Committee passed the bill, but on a closer than expected vote. ACORN responded by releasing a campaign contribution study showing that House Committee members who voted to gut CRA received more than four times as much in contributions from the financial industry than those who voted to protect CRA. In the full House, the Republican majority tacked on seven amendments which made the bill markedly worse.

Meanwhile, ACORN mounted a concerted media campaign to bring attention to the benefits the CRA has for ordinary Americans and the severe danger it faced at the hands of the Republican Party. Former renters who became homeowners through ACORN’s lending agreements attested to the importance of CRA in making mortgages available to families like theirs. They invited members of Congress, local officials and the media to housewarming parties at their new homes. Some of these events celebrated milestones like the 500th ACORN Housing Corporation homeowner in St. Louis.

ACORN members also protested en masse at the offices of elected officials who had yet to publicly voice their support for CRA. In Little Rock and Minneapolis, pressure from ACORN members generated city council resolutions supporting CRA and urging respective Congressional delegations to do the same. Austin not only endorsed CRA but voted to entrust city funds only to banks with good CRA ratings.

In the Senate, the public concerns and pressure slowed the momentum of the bill. Responding to the vocal support for CRA, President Clinton was extremely critical of the House measure, although he fell short of promising to veto the bill. In the end, the GOP members of the Senate Banking Committee responded to the criticism and deleted the anti-CRA provisions from the banking regulatory relief bill. It was a major victory for ACORN and other community groups. The lesson, though, is that protecting CRA requires constant vigilance. ACORN stands ready to repeat the fight whenever the threat reappears.

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