Banks Must Distribute Lending Opportunities Equally

The 1960s and 1970s saw a surge of legislation addressing fair and equal access to housing and credit opportunities.  During this period, Congress passed the Fair Housing Act in 1968, the Equal Credit Opportunity Act in 1974 and the Community Reinvestment Act (CRA) in 1977. 

The CRA serves as the foundation for financial inclusion incentives, encouraging banking institutions to do business in all communities equally, including low- and moderate-income neighborhoods. Federal banking regulatory agencies do this by ranking banks on their ability to meet and deliver on the credit needs of the entire community.

But too often, banks aren’t holding up their end of the bargain. Many Texans who proudly own and use firearms could have their second amendment rights stripped from them if activists succeed in starving gun companies of their access to the banking system. Thankfully, these concerns are bringing the House Financial Services Committee together this week to review the CRA’s mandate to better serve all Americans.

At the end of December, Senate members reached out to the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board of Governors to illuminate the financial injustice occurring to many lawful industries that are disfavored by the political left.

Unfortunately, these bad practices have been common for years and it’s time that Congress addressed it.

In 2013, this financial discrimination began under the Obama Administration. An initiative of the U.S. Department of Justice, “Operation Chokepoint”, investigated the business dealings of banks with firearms dealers and other “high risk” industries. The operation officially ended in 2017, but the lasting effects are still being felt in our communities.

This blatantly violates the CRA’s intent to provide equal and non-discriminatory lending opportunities for all. The firearms and ammunition industry is a $52 billion industry, supporting nearly 163,000 jobs and generating over $6.82 billion in federal and state taxes. As an industry providing necessary jobs and services to many overlooked regions, firearms dealers deserve the same access to lending opportunities as other small business owners in their communities.  

Firearms owners are seeing damaging effects to their constitutional rights through this violation of the CRA, and largely in rural areas where 58 percent of households own a firearm. Rural towns often fall into the category of “low- and moderate-income neighborhoods” that guides the application of the CRA. In these communities, the local firearms dealer may often be a small business owner, operating the same way as other small business owners, but denied lending opportunities from their local bank. 

In 2019, Texas ranked No. 1 in the U.S. for the highest number of registered weapons at 725,368 firearms. The small city of Seguin, Texas alone is home to eight firearms dealers. Nearly all are proudly owned and operated by small business owners, with a few of the locations offering firearms training and other services — which require additional equipment, practice facilities and access to capital. These training services are also beneficial to local law enforcement. If these small business owners were not allowed access to equal lending opportunities, valuable services wouldn’t be available and the banks would be directly violating the CRA.

In December, President Donald J. Trump’s administration finally proposed sweeping changes to the Community Reinvestment Act, its first update in nearly 43 years. As Congress considers the modernization of this program, Rep. Vincente Gonzalez should stand up for the constitutional rights of Texas constituents and ensure that all members of our community are treated equally by our local banks. The future of our right to choose depends on this.


Thomas Shaar is a cattle rancher and avid sportsman from Comal County, Texas.

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