Hartford Business Journal

www.HartfordBusiness.com • March 9, 2020 • Hartford Business Journal 25 OPINION & COMMENTARY innovation and progress. And BP wants to do its part in reducing global emissions. BP's new CEO Bernard Looney recently announced our ambition to become a net zero company by 2050 or sooner. BP's support for carbon pricing is part of this bold vision. We believe in it so much, we're stop- ping corporate reputation advertising and re-direct- ing that money to promote net zero policies, ideas and collaborations instead. But while companies like BP can — and must — play a leading role in bringing about a lower carbon future, strong and effective government policy is essential. Put simply, the world isn't moving fast enough to curb emissions and limit the impacts of climate change. While a national carbon pricing program could become the gold standard in the future, state and regional plans can play a critical role now — and we can't wait. That's why BP supports well-designed carbon pric- ing programs. Gov. Lamont and Connecticut have a real opportu- nity to lead on reducing regional carbon emissions. Carbon pricing is the most efficient and comprehen- sive way to reduce greenhouse gas emissions. Susan Dio is chairman and president of BP America, an oil and gas company based in Texas. OTHER VOICES New federal CRA proposal could mark return of redlining in Hartford By Rex Fowler A few months ago the Trump administration quietly rolled out a proposal, which, if enacted later this spring, could have a substantial and negative impact on cities like Hartford. The proposal was introduced by Joseph Ot- ting, head of the Office of the Comptroller of the Currency (OCC), one of three bank regula- tory agencies, and would significantly weaken the Community Reinvestment Act (CRA). CRA is a federal law passed in 1977 intended to counteract decades of racist and discriminatory lending policies and prac- tices by banks — practices commonly referred to as "redlining." Back in the 1930s, the federal government graded neighborhoods in and around Hartford and more than 200 other metro areas based on their perceived investment risk. Each neighborhood was placed in one of four categories, from best (an "A"-rated neighbor- hood, shaded in green on government maps) to worst ("D"-rated neighborhoods, shaded in red). Federally backed mortgages and other lending incentives were offered for bank loans made in higher-rated communities like West Hartford and Simsbury, and discouraged in neighbor- hoods like mine in Hartford's north end. Much of the government's determination of a neighborhood's respective risk rating was based on the race and ethnicity of residents in the community it was assessing. Neighborhoods where government appraisers detected an "infiltration of negroes" (their words, not mine), or which were occupied by other non-white residents were typically given the poorest rating and cut off from credit. As a consequence, the flow of capital to such neighborhoods in Hartford was reduced to a trickle. Despite efforts by the federal govern- ment to address such discriminatory policies starting in the late '60s, I still see the subse- quent effects of decades of disinvestment on my block and in my neighborhood every day. For the last 40 years, the one silver lining for these communities has been the Community Re- investment Act. As the result of CRA, banks have been required by their respective regulatory agen- cies to demonstrate that they're not redlining, but actually investing in the low- and moderate- income communities where they operate. Historically this has taken the form of bank investments in homeownership counseling programs, affordable mortgages for first-time homebuyers, and more flexible small business lending programs. Banks can receive CRA credit by opening branches in low-income neighborhoods or pro- viding grants to nonprofits providing products or services in such communities. Banks can invest in nonprofit community development financial institutions like mine, which are often able to make loans in low-income neighbor- hoods easier than the bank could. CRA has been a catalyst for hundreds of billions of dollars of investments in low- and moderate- income (LMI) neighborhoods across the country. According to the National Community Reinvestment Coalition, from 2009-2018 CRA qualified lending in Greater Hartford resulted in $8.2 billion in mortgages to LMI homeown- ers or in LMI neighborhoods, and $1.9 billion in small business loans in LMI neighborhoods. But in January OCC head Otting proposed big changes to CRA that would allow banks to get CRA credit for a much wider range of activities that could have little or no benefit to historically underserved communities. Providing a financial counseling workshop for high-net-worth retirees from Avon? That could count. Financing a new scoreboard in a sports stadium located in a federal Opportu- nity Zone — like Dillon Stadium in Hartford? Sure, that could work as a CRA-eligible invest- ment under the new guidelines. In fact, under the OCC's proposed new "One Ratio" method of assessing a bank's CRA per- formance, a large investment of this nature by a bank — even if it has no direct benefit to residents of the surrounding community — could offset a potential elimination of small business and mortgage lending by the bank in the same neighborhood. Bigger investments in the right projects would mean more to regulators than historic CRA ac- tivities that have been weighted toward products and services that actually benefit residents in low-income and underserved communities. There's no arguing that the ways communi- ties access financial services have changed since the CRA was passed in 1977. The law needs to be updated, but this proposal from the OCC isn't the way to do it. Rex Fowler is CEO of Hartford Community Loan Fund and a resident of Hartford's northeast neighborhood. Rex Fowler worry they may be asked to foot the bill, Gjede said. Supporters of the law may read this column and conclude I'm just another out-of-touch man not cognizant of the average workers' struggles. As a new parent I'd rebut that idea, at least partially. When my wife and I welcomed our first child last June, I didn't get paid family medical leave. Sure, I wish I had it, but as a manager I also looked at the resources we had and how challeng- ing it would have been if I was gone for 12 weeks. I took three weeks of vacation and was paid for time off. Luck- ily, my wife had more paid time off and we had good family sup- port. Not everybody has those things — I understand that. But I also think legis- lators view all business owners as corporate fat cats and fail to distin- guish between the man or woman trying to keep that seven-person operation afloat from the corporation paying their executives multimillion-dollar salaries and bonuses. There is a difference and if lawmakers don't learn that soon, Connecticut's economy will continue to underperform. I also think legislators view all business owners as corporate fat cats and fail to distinguish between the man or woman trying to keep that seven-person operation afloat …

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