Millions of New Jerseyans face an affordability crisis. Working families and people of color are particularly vulnerable. The racial wealth gap in New Jersey currently stands at an average of $600,000 between white families and Black and brown families, and is only getting worse.
The proposed state-level Community Reinvestment Act (CRA) (S2722/A4797) introduced by State Senator Britinee M. Timberlake and Assemblywoman Verlina Reynolds-Jackson would make capital and credit more readily available to the communities and families who need it most. A state-level CRA will help New Jersey more effectively fight discriminatory lending and credit practices against low-income neighborhoods and communities of color, also known as redlining. The legislation will encourage small business lending, community development of affordable housing where it's most needed, and equip our state with the tools to better respond to and regulate a rapidly changing financial landscape.
The movement to enact state-level CRAs comes at a critical time. The Trump administration is attempting to rollback the Federal CRA that was passed in 1977 as part of efforts to end and reverse redlining, as well as many other consumer protections. These policy changes will deny further generations of Black, brown, and working families financial pathways to achieving the American Dream.
Why New Jersey Needs a State CRA
- Redlining and Discrimination Persist: A recent investigation found evidence of unlawful redlining by Republic First Bank in New Jersey. Read the report
- Market Gaps: Non-bank lenders like fintechs dominate New Jersey’s mortgage market (over 56% in 2024), yet face minimal reinvestment obligations.
- Federal CRA Limitations: Recent rules aimed at strengthening the federal CRA were reversed in 2024, further weakening protections and oversight. The Trump administration is attempting to rollback the landmark law even further.
- Racial Wealth Gap Has Doubled: According to the Institute for Social Justice, the median net worth of white families in New Jersey is now over 40 times that of Black and Latino families. Read the report
What a New Jersey CRA Would Do
- Cover state-chartered banks, non-bank mortgage lenders, and credit unions.
- Require regular evaluations of institutions' lending, investment, and services in low-and moderate-income and BIPOC communities.
- Create assessment areas based on where institutions conduct business, not just branch locations.
- Enhance data disclosure, small business lending transparency, and public input in mergers and licensing.
- Authorize enforcement mechanisms including improvement plans and merger denials for low performers.
We urge New Jersey's elected leaders to support and enact S2722/A4797 as soon as possible.