House Banking Panel Votes Protection for Poor Areas

Urged on by busloads of community activists, the House Banking Committee voted 40-12 Thursday to reinstate the law protecting poor neighborhoods from discrimination by banks.

The vote by the 52-member committee reverses a decision by its 36-member subcommittee on financial institutions, which last month decided to exempt 80% of the nation’s banks from the 1977 Community Reinvestment Act.

Consumer groups and organizations representing poor people had reacted with outrage to the subcommittee vote on an amendment sponsored by Rep. Paul Kanjorski (D-Pa.).

In response, the Assn. of Community Organizations for Reform Now, or ACORN, bused poor people to Washington from New York, Chicago and St. Louis. They lined up outside the committee’s hearing room in the early morning hours, displacing many financial industry lobbyists who usually make up the audience.

“They finally learned that the people do care,” said Danita Lowe, an ACORN member from St. Louis.

However, as a price for reversal, advocates of the Community Reinvestment Act gave up an extension of the law, which the subcommittee also had adopted.

That provision, sponsored by Rep. Joseph P. Kennedy (D-Mass.), would have required that banks receiving new authority to branch across state lines or to affiliate with securities firms have at least a satisfactory record of lending to low- and middle-income neighborhoods.

Kanjorski had argued that the community lending law imposed an expensive paperwork burden on small banks and that enforcement of the law should be focused on large urban banks.