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FOR IMMEDIATE RELEASE |
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State
Rep. Chelsa Wagner |
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Wagner calls on Congress to protect Pittsburgh's low-income borrowers
HARRISBURG, Oct. 8 – Amid economic turbulence, the state House took measures this week to ensure protection for Pittsburgh's borrowers from unfair lending practices in light of the merger between Bank of America and Countrywide Home Loans by adopting a resolution sponsored by Rep. Chelsa Wagner, D-Allegheny.
In July, Bank of America bought Countrywide Home Loans and has become the region's largest lender with possibly more than an 11 percent share of all home loans in the Pittsburgh market.
Financial institutions are regulated in part by the federal Community Reinvestment Act of 1977. Banks and lenders are monitored and evaluated based on their level of lending, investments and services in low-income neighborhoods. If an institution's record of service fails to meet minimum standards, it may be subject to delays or denials of mergers, acquisitions or expansion of services. The most recent review of the CRA did not examine Bank of America's lending performance in Pennsylvania or the Pittsburgh market merely because the bank does not maintain any actual buildings in the state.
However, the National Community Reinvestment Coalition issued a report with data that concerned Wagner. According to the NCRC report, Bank of America and Countrywide Home Loans issued a disproportionately low portion of prime loans in Pittsburgh's market to African Americans as well as low- and moderate-income borrowers.
"Given the record of lending services to our lower-income and minority borrowers here in Pittsburgh, we need federal regulators to take a close look at Bank of America's practices in light of the potential merger with Countrywide Home Loans to ensure equal treatment," Wagner said. "If Bank of America is subject to the CRA in the Pittsburgh market, they would be compelled to deliver better products to our region, increasing competition, and would benefit every borrower and prospective borrower -- not just low income or minority. Additionally, Bank of America's foundation would contribute to Pittsburgh causes. In a time when all money is getting tighter, having their investments in our region would be a boost that is deserved by our residents doing business with them."
Wagner's resolution will be sent to Congress and the Comptroller of the Currency for the United States Treasury urging them to add the Pittsburgh region to Bank of America's list of CRA assessment areas. Copies of the resolution will be sent to members of the Pennsylvania's congressional delegation. By doing so, Wagner hopes to ensure fair lending practices for the Pittsburgh region that fulfill federal requirements.
Wagner noted that the Pittsburgh Community Reinvestment Group, which helps local homeowners facing foreclosure, was instrumental in developing her resolution.
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