Statement on Reform of Regulations Implementing the Community Reinvestment Act

Today I am pleased to announce completion of a commitment I made to reform the regulations implementing the Community Reinvestment Act. These reforms help fulfill two important promises I made to the American people: to increase access to credit for all Americans and to decrease Federal regulatory burdens.

Combined with my administration's community development banks and financial institutions initiative, the Empowerment Zone/Enterprise Community program, an expanded earned-income tax credit, and our continuing effort to strengthen the economy, the reformed Community Reinvestment Act regulations will give many more Americans a chance to realize the American dream by greatly expanding individual opportunity—empowering every American to improve their own lives.

At a time when funding from all levels of government is scarcer and scarcer, the ability of our communities to help themselves takes on special importance. That's what the Community Reinvestment Act is all about.

With the new regulations in place, the statute will increasingly have a positive impact on the lives of countless Americans who work and play by the rules. Many more financial institutions will discover new, profitable lines of business. And it doesn't cost taxpayers a dime. It can create miracles in small towns and big cities from coast to coast, miracles like mortgage or business loans for people who never thought they could own a house or business, multifamily housing loans, and commercial development loans in low to moderate income communities.

To maximize the benefits that can accrue to both banks and consumers, the final regulation issued today by the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Board of Governors of the Federal Reserve, and the Federal Deposit Insurance Corporation will place emphasis on performance, not paperwork. The new regulations will make the act easier for banks to implement and will result in more consistent evaluation of their performance. With these improved regulations in place, the statute can reach its full potential to help our communities help themselves. Now is the time to end uncertainty and get on with business, not to tinker with the statute.

Producing this final regulation has taken a lot of effort on the part of the regulators and has involved excellent input from financial institutions and community groups throughout the country. I want to congratulate and thank everybody who participated in this process.