Group pushes feds to declare Flint a disaster area

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The National Community Reinvestment Coalition (NCRC) is calling on financial regulators to declare Flint, Mich., a designated disaster area in response to the city’s water crisis.

The group wrote to federal officials on Thursday asking them to encourage banks to make loans to the city and its residents to help repair or replace corroded pipes that contaminated the water supply with lead.

The NCRC said federal agencies declared disaster areas after Hurricane Katrina and used the Community Reinvestment Act (CRA) to boost loans and investments for affected communities.

{mosads}“While not technically a ‘natural’ disaster, the emergency in Flint matches the emergencies caused by natural disasters in that factors and events which are out of the control of local residents caused widespread distress and threats to health and safety,” the group said in it’s letter. “Extraordinary efforts, including a focusing of bank CRA activities, are warranted to assist residents of Flint reclaim their lives and property.”

The organization represents local community investment groups. Their letter was sent to Federal Reserve Chairwoman Janet Yellen, Comptroller of the Currency Thomas Curry and Federal Deposit Insurance Corporation Chairman Martin Gruenberg.

The NCRC said the amount of distress caused by unsafe levels of lead in Flint’s drinking water has made banks hesitant to offer home loans because of requirements for houses to have potable water.

“One of the worst outcomes of this crisis would be withdrawal of bank credit and capital for this devastated city,” the letter said.  

In a statement, NCRC President and CEO John Taylor said this sort of crisis requires a collaboration between the government and private sector institutions, including banks.

“This is precisely why a community has its wealth stored in financial institutions — no other individual or corporation has the financial capacity and responsibility to respond to catastrophic events like a financial institution,” he said. 

Tags Community development Community Reinvestment Act Federal Deposit Insurance Corporation Federal Reserve System Natural Disaster United States federal banking legislation

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