Leveraging BANK'S Community Reinvestment Funding for
climate adaptation
Rebuild by Design is working to drive investments in equitable climate infrastructure in low-to-moderate income communities under the new changes to the Community Reinvestment Act (CRA).
The Opportunity
The Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and Financial Stability Oversight Council recently changed the requirements for the Community Reinvestment Act. The updated requirements allow for investments in “disaster preparedness and climate resilience”. This creates a new frontier for private finance in climate change resilience initiatives that support thousands of low to moderate communities. However, there is still a great need for banks to understand the types of projects they should invest in to create the greatest benefits for communities. The research and analysis from this project will result in resources and guides to drive private investments in equitable climate infrastructure in low-to-moderate income (LMI) communities under the new CRA rules. Leveraging these dollars can assist in creating new, long-term climate infrastructure that address increasingly frequent extreme weather events with other co-benefits such as equity, health, ecological, and social resilience.
What is Rebuild by Design doing?
To drive investments in equitable climate infrastructure in low-to-moderate income (LMI) communities, Rebuild by Design is working to:
1) develop a concrete understanding of how current climate infrastructure is financed and what will become allowable under the CRA amendment, and
2) develop two guides — one for communities and one for banks — to understand how they can leverage this opportunity to fund needed climate infrastructure upgrades.
Images: (above) Brooklyn, New York HOLC Redlining Map, April 1, 1939 (right) Federal Reserve, 1977
President Carter signing the Community Reinvestment Act on Oct. 12, 1977
WHAT IS THE "COMMUNITY REINVESTMENT ACT"?
The Community Reinvestment Act, enacted in 1977, requires the Federal Reserve and other federal banking regulators to encourage financial institutions to help meet the needs of communities in which they do business, including low-to-moderate income (LMI) neighborhoods. The Community Reinvestment Act was a direct response to reducing discriminatory practices against low-income neighborhoods, a process known as redlining.
REBUILD BY DESIGN IS WORKING WITH PARTNERS TO UNCOVER
- How CRA funding can be leveraged for high impact, equitable climate adaptation resilience projects;
Where bank investments can make the greatest impact in improving resilience in LMI communities;
Potential best practices for CRA investments in climate adaptation infrastructure;
How to use CRA investments to reach banks’ own environmental goals.
Rebuild by Design is working with a NYU Capstone class to create a series of case studies to understand the best opportunities for private injection into resilience projects across different hazards, and at different scales; and a criteria for principles of equitable climate investment will be developed to drive equity focused, multi hazards, physical and social infrastructure that will help communities adapt to climate change.
PROJECT OUTCOMES
The outcome of this project will be the development of two guides – one for communities and one for banks, to understand how they can leverage this opportunity to fund needed climate infrastructure upgrades.
Thank you to the Wells Fargo Foundation for championing this work with us.
Follow Us on Twitter
Subscribe to Rebuild on
