Washington Conservative Republicans are capitalizing on the troubles of community activist group ACORN — ranging from charges of voter registration fraud to embarrassing videos of its employees — to revive their long-standing fight against a federal law that grades banks on their investments in poor and minority neighborhoods.
The 1977 Community Reinvestment Act was intended to end redlining, a practice in which banks in effect walled off many inner-city neighborhoods from mortgage loans. But some GOP lawmakers say it has outlived its purpose and is being used inappropriately by ACORN to shake down banks for money. They want to repeal the law, scale it back or at least block a Democratic proposal to expand it.
Critics of the law are linking it to ACORN — a subject many Democrats wish would go away — at every opportunity.
“Should we repeal CRA? Absolutely,” said Rep. Jeb Hensarling, R-Texas, a member of the House Financial Services Committee. “Do we have the votes for it today? I seriously doubt that.”
Rep. Ed Royce, R-Calif., also on the committee, has described ACORN’s actions under the law as “legalized extortion,” contending that the law gave ACORN the power to stall or prevent bank mergers or expansions by filing CRA complaints with regulators.
ACORN said that nearly all the money it receives from banks is used to provide advice to first-time home buyers or homeowners who are at risk of losing their homes to foreclosures, and that the money isn’t used for political advocacy.