NCRC, NJCA Urge Passage Of State CRA Legislation In New Jersey

The National Community Reinvestment Coalition (NCRC) and New Jersey Citizen Action (NJCA) along with other New Jersey advocacy groups urged state lawmakers to take up and swiftly pass S4694/ A5957, the groundbreaking legislation introduced last week to create a state-level Community Reinvestment Act (CRA) by Senator Britnee N. Timberlake and Assemblywoman Verlina Reynolds-Jackson.

"It's a happy day seeing this bill introduced, but the hard work won't be done until the New Jersey legislature has passed these vital supports for marginalized communities into law," said NCRC President and CEO Jesse Van Tol. "With federal modernization of CRA stalled, and the persistent efforts by the banking lobby to keep it that way, it is especially important that states work to pass their own framework. I applaud NJCA and their local partners for their diligence and determination in pushing for a policy that will drive new dollars into historically marginalized communities once the legislature and governor do the right thing."

New Jersey's state CRA package includes numerous NCRC and NJCA recommendations, such as holding banks accountable everywhere they have a significant presence instead of limiting CRA oversight to their physical branch networks. It also extends CRA review beyond banks to include online institutions, credit unions and non-bank mortgage lenders, which are now the primary source of much of the lending that shapes families' ability to build wealth.

"We applaud Senator Timberlake and Assemblywoman Verlina Reynolds-Jackson for introducing this important legislation, especially at a time when the current administration in Washington has just withdrawn Department of Justice settlement agreements with banks accused of discriminatory practices in communities of color," said Beverly Brown Ruggia, Program Director for Financial Justice at New Jersey Citizen Action. " The bill will provide critical tools to fight persistent redlining in New Jersey, an issue that continues to drive up the state's racial wealth gap that has reached a staggering $600,000 . Trump administration is seeking to roll back a 2023 CRA rule that would have strengthened investment in low- and moderate-income communities in New Jersey where we need it the most and which would have modernized the federal CRA to reflect the dramatic changes in banking and finance in the digital age."

The CRA is critical to holding banks accountable for equitable reinvestment in low- and moderate-income communities, including communities of color. At a time when the Trump administration is seeking to roll back CRA rules at the federal level, a state-level CRA would:

• Foster investment among low- and moderate-income communities and communities of color who have been underserved by investment and financial institutions for decades.

• Provide oversight and guidance on best practices for New Jersey's financial institutions; supporting good actors, while holding bad actors accountable.

• Respond to the rapidly changing nature of the current banking and finance environment and to the emergence of new types of financial institutions.

• Provide oversight that has been weakened and, in some cases, eliminated at the federal level by Trump administration.

"New Jersey's Community Reinvestment Act demands accountability from all financial institutions profiting here - banks, non-banks and more," said New Jersey State Senator Britnee N. Timberlake, the bill's primary sponsor in the Senate. "With federal protections fading and corporations extracting wealth without reinvesting, our state must step up to protect vulnerable communities and ensure fair reinvestment where it's needed most. Modeled after the federal CRA, the state version expands oversight and reinforces commitments to reduce foreclosures and boost lending to small businesses - including those owned by women, veterans, and minorities."

The bill would make New Jersey just the seventh state to ensure that lenders pay appropriate attention to the people and places that were locked out of the financial system for much of the 20th century. New Jersey would also be just the second state to include a disparity study among its CRA enforcement mechanisms, after Illinois recently became the first in the nation to adopt that particular NCRC recommendation.

"The federal CRA no longer fully addresses the complexities of today's financial landscape. New Jersey has an opportunity to lead where federal oversight falls short by passing a robust state CRA, tailored to our local economy and banking realities," said Director of CRA at New Jersey Citizen Action, Leila Amirhamzeh. " Furthermore, banks are able to best reach and invest in smaller and rural areas, and the benefits are tangible - small businesses grow, families access affordable mortgages, and low-income communities thrive."

Numerous other state and local advocacy organizations helped drive the legislative initiative and celebrated its progress toward passage.

"This legislation is a major step forward in the fight for economic and racial justice in New Jersey," said Staci Berger, President and Chief Executive Officer of the Housing and Community Development Network of New Jersey. "Redlining and discriminatory lending practices are not relics of the past-they continue to harm low- and moderate-income communities and communities of color across our state. By strengthening oversight and requiring greater accountability from financial institutions, this bill brings the spirit of the federal Community Reinvestment Act into sharper focus here at home. At a time when the CRA faces ongoing threats at the federal level, New Jersey is taking bold, proactive steps to protect our communities and ensure every neighborhood receives its fair share of investment, lending, and opportunity. This legislation is not just timely-it's necessary."

"As Executive Director of the United Black Agenda, I fully support this legislation. It aligns with our 2025 platform, which calls for stronger oversight of lending institutions and fair access to credit for Black and Brown communities across New Jersey," said United Black Agenda President, Rev. Eric Dobson. " For decades, our communities have been shut out of wealth-building opportunities-through redlining, disinvestment, and predatory financial practices. This bill finally gives the state the tools to hold banks and lenders accountable. It brings transparency, public input, and measurable benchmarks to the table-things we've long called for in our Fair Lending work. I'm especially encouraged by the required disparity study and the focus on community benefit plans. These are not just technical fixes-they're steps toward closing the racial wealth gap and ensuring financial institutions serve all of New Jersey, not just the wealthy few. The UBA stands behind this effort."

"Modern-day redlining - in which banks fail to serve Black and Latino communities - persists in New Jersey and across the nation, as evidenced by a number of settlements with banks in recent years," said Laura Sullivan, Director, Economic Justice Program for New Jersey Institute for Social Justice. "As federal enforcement is being rolled back and non-bank financial institutions take on greater and greater shares of the home lending market, a state CRA is crucial for expanding assess to homeownership and fair lending for communities of color and closing our staggering racial wealth gap."

Photo of New Jersey capitol building courtesy of Ken Lund via Flickr.