The Center for Responsible Lending (CRL) and the Center for Community Self-Help (Self-Help) appreciate the opportunity to comment on the Federal Housing Finance Agency’s (FHFA) Request for Input on Climate and Natural Disaster Risk Management at the Regulated Entities. CRL is a nonprofit, non-partisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is an affiliate of Self-Help, one of the nation’s largest nonprofit community development financial institutions.

For over 40 years, Self-Help has created asset-building opportunities for low-income individuals, rural communities, women, and families of color. In total, Self-Help has provided over $9 billion in financing to 172,000 homebuyers, small businesses, and nonprofit organizations and serves more than 160,000 mostly low-income families through 72 credit union branches in North Carolina, California, Florida, Illinois, South Carolina, Virginia, Washington, and Wisconsin. Since 1989, we have invested $357 million in projects that have created a positive environmental impact in the communities we serve and $41 million in portfolios of home energy efficiency loans. We have built 110 affordable homes that carry energy efficiency guarantees and helped nonprofit partners do the same.

Climate change and natural disasters pose existential risks, but the risks and impacts are not equally borne. As discussed below, climate change and natural disasters have a disproportionate impact on low- to moderate-income communities and communities of color, driven by historic and ongoing inequities and government-sponsored redlining. In assessing how the GSEs should manage and mitigate the risks of climate change, FHFA should apply a racial justice and equity lens. The GSEs’ public mission must also remain central.

CRL and Self-Help provide the following recommendations:

  1. The GSEs’ must serve the entire housing market, including Black and brown families, and should pool risk.
  2. FHFA and the GSEs should prioritize transparency.
  3. FHFA and the GSEs must utilize a fair lending lens in assessing climate risk and the impact on communities of color.
  4. The GSEs should consider adopting a climate resilience and environmental justice mandate utilizing a racial justice lens.
  5. FHFA should consult with key stakeholders and pursue a robust research agenda to better understand the impact of climate change, particularly on communities of color.