Could A Banking Law Designed To End Redlining Drive More Capital Into Local Journalism?

By Andrew Nachison

Changes to federal bank rules that influence trillions of dollars of loans, investments, philanthropy, and services in lower-income communities could offer a new path to survival for struggling local news and information providers.

The Multicultural Media & Correspondent Association (“MMCA”), a network of Black, Indigenous, and People of Color (BIPOC) media owners and advocates, is asking its members to sign a comment letter that urges bank regulators to add financing, investments and spending with minority-owned media to a list of community development activities that earn banks credit under the Community Reinvestment Act (CRA).

Publishers and others who wish to sign MMCA’s CRA comment letter should click this link.

MMCA is leading a national effortin collaboration with the Reynolds Journalism Institute at the Missouri School of Journalism, to create a stronger and more equitable economy by investing in media outlets that prioritize underserved communities and communities of color, which MMCA refers to as  “Equitable Media.”

“Just as redlining in lending has had devastating consequences for BIPOC communities, the ongoing and purposeful lack of investment in the media organizations that prioritize their information needs is perpetuating information disparities and harming traditionally underserved communities,” said MMCA CEO David Morgan. “This media redlining, combined with the crushing loss of advertising revenues exacerbated by the COVID-19 crisis, poses an existential threat to local, BIPOC-owned media.”


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Federal regulators have proposed sweeping changes to the rules banks must follow to comply with CRA, a 1977 law that requires banks to provide loans and services in all the communities where they are chartered to do business.

The law was originally enacted to reverse and erase the impacts of 20th Century redlining, a system of intentional, government-sanctioned discrimination that excluded entire neighborhoods from mortgage and small business lending by banks.

Federal regulators have proposed what would be the first major update to CRA rules since 1995. Public comments on the proposal are due August 5 (2022).

CRA by itself didn’t close the nation’s profound racial and socio-economic gaps in wealth holdings. Today, people who live in formerly redlined neighborhoods suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher incidence of chronic diseases.

But the law did have a huge impact on how banks work, who they work with, and on the reinvestment of bank deposits into underserved communities. Banks attributed to CRA at least $2 trillion in community development financing between 1996 and 2017, and nearly $3 trillion in home and small business loans to lower-income borrowers and communities between 2009 and 2018.

MMCA wants banks to direct some of that capital into equitable media committed to the information needs of their communities, and to have that objective spelled out in the new CRA rules.

That would create a new way for banks to meet their CRA obligations – for instance, by supporting community news and information services that inform residents of homeownership counseling fairs, or by reporting on environmental hazards that need to be removed to facilitate new investments in a neighborhood.

It would also be a rare shift in public policy to encourage private investments in local news and information services, which is desperately needed.



Local journalism in America has been dying a slow death since the early 2000s, and the collapse is now so deep that local news is disappearing altogether from growing pockets of news “deserts.” About 7% of the nation’s counties now have no local newspaper, according to a 2022 report on the state of local news from Northwestern University. 

Local news providers have mostly failed to come up with new and reliable revenue streams to sustain the production of local reporting and information services that were once enormously profitable when newspaper publishers bundled news, editorials, and letters to the editor with comics, sports, and entertainment information – and also with advertising from local merchants. Now those ads are on Google, Facebook, Instagram, Yelp, LinkedIn, Craigslist, TikTok, and other national and global tech platforms. US newspaper revenue dropped 52% between 2002 and 2020, from roughly $46 billion to $22 billion, and newspaper publishers shed half their newsroom employees between 2008 and 2019.

At the same time, disinformation, conspiracies, and deepened political divisions, amplified through weaponized social media platforms, have eroded trust in news and in journalists themselves.

A nascent generation of nonprofit and for-profit local news startups are trying to fill the void, but even the most innovative among them face the same economic headwinds.

If local, independent, fact-based journalism hasn’t vanished completely from your community, what’s available there is likely a feeble relic of what was there 20 years ago, with fewer full-time reporters and editors, little or no investigative reporting and less routine coverage of local news, government, elections, schools, housing, business, health, public safety, justice, culture and other services and essential ingredients of everyday life.

That’s not to say that local journalism in past decades was a nirvana for public knowledge or informed citizenship. In the wake of the 2020 racial justice protests over the police murder of George Floyd, a stream of old, mainstream newspapers that once dominated civic life and politics in their communities published confessional apologies for their decades of blatant and devastating racism in their coverage and business practices, which contributed to the landscape of inequality, including disinvestment in communities of color, and the racial and socio-economic wealth divides that endure across the nation today. See, for instance, mea culpas over past failures from the Orlando SentinelBaltimore Sun and Los Angeles Times.

One outcome of 20th Century redlining in communities of color was limited investment in locally owned media dedicated to covering the news of those communities.

Adding community-driven news to the mix of services financed by CRA won’t end America’s local journalism crisis. But it’s a novel and sorely needed shift that could spark new investments in news. Beyond that, it would also symbolically recast local news and information as necessary and critical for all communities, just like the people and systems necessary to provide housing, roads, electricity, clean air and water, healthy food, reliable broadband data networks, schools, healthcare and cultural institutions. 

That’s an urgently needed change in perspective for policymakers, lenders, community development leaders – and for news providers as well. They don’t simply “cover” their communities. They are part of the fabric of their communities, and without them, the fabric tears apart.

For more on the proposed changes to CRA rules and sample comment letters, see the TreasureCRA hub from the National Community Reinvestment Coalition. Public comments are due Aug. 5, 2022.

Andrew Nachison is NCRC’s Chief Communications & Marketing Officer.

Photo by Brad Neathery on Unsplash

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