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From Dr. King to the Community Reinvestment Act: How His Dream Marches On

By

Caleb Bobo

In 1968, Martin Luther King Jr. found himself in Memphis, Tenn., to support the protests of black public works employees who felt they were being mistreated by their employer. While there, King gave a speech titled “I’ve Been to the Mountaintop.” In it he stressed the importance of intentional social action on behalf of the economically disenfranchised and closed his speech by imploring the audience to continue fighting, even after he passed away.

The very next day, King was shot while standing on the balcony of his hotel room and died shortly thereafter.

Often lost in the suddenness and tragedy of his death, King’s reason for being in Memphis is critical to understanding his life, his work and, ultimately, his legacy. His advocacy led to the creation of a policy agenda that sought to protect the rights of all Americans. Those rights included equal access to public accommodations and the ballot box, but also equal treatment within America’s economic institutions and systems.

Although America struggled to make sense of King’s death, his agenda marched on. Just a few days after that dreadful evening, Congress passed the Civil Rights Act of 1968. More commonly known as the Fair Housing Act, this legislation made housing discrimination on the basis of race, color, religion, sex, national origin or family status illegal. It also gave victims the power to seek redress through newly created federal mechanisms, making it a substantive victory for the movement toward equality.

However, the nation and Congress quickly learned that simply banning discrimination proved insufficient to ensuring equal access to housing for the underserved. Other barriers and biases persisted, stifling the pursuit of resources needed to acquire a safe and affordable residence.

Continued efforts throughout the late 1960s and early ’70s led to the passing of the Equal Credit Opportunity Act (ECOA) of 1974 and the Home Mortgage Disclosure Act (HMDA) of 1975. The former prohibited lending discrimination based on a borrower’s race, color, religion, national origin, sex, marital status, age or receipt of public assistance funds. The latter sought to provide the public with the necessary information to assess a financial institution’s efforts to serve the housing needs of their communities. Together, both pieces of legislation furthered the efforts of leaders like King by endeavoring to level the economic playing field for people of color, low- and moderate-income (LMI) populations and other protected classes.

The Community Reinvestment Act (CRA) of 1977 was passed soon thereafter to ensure that financial institutions provided fair and equal access to credit in all of the communities from which they received deposits. The CRA sought to end the discriminatory practice of redlining by encouraging financial institutions to meet the credit and community development needs of their entire service area, specifically LMI neighborhoods.

Over the next two decades, lawmakers and presidential administrations proposed and approved several changes to the CRA. While certainly not perfect, the law has amassed a substantive track record spurring housing, small-business, small-farm and community investment for LMI residents and in LMI neighborhoods. That successful track record, like the origins of the ECOA and HMDA, can also trace its roots to the civil rights movement that King and so many others fought for during the 1950s and ’60s that emphasized civil and economic rights.

April 4, 2018, marked the 50th anniversary of King’s assassination. While time has surely passed, efforts to improve the lives of LMI individuals persist across the Federal Reserve’s Eighth District. King knew that civil rights, equal opportunity and economic justice are one and the same. Fifty years later, the work of Martin Luther King Jr. marches on.