Pittsburg Post Gazette, October 6, 2020, Another Hurdle In Pandemic Recovery: Split Between Banking Regulators On Community Development
The Federal Reserve voted to revise the Community Reinvestment Act adopted in 1977. The Fed opened up this process to the public, and gained much controversy from outside parties. Two financial regulators specifically were split in ideals when it came to the adaptations of the CRA.
WASHINGTON — A split between two financial regulators over rules governing investment in low-income communities has created uncertainty that could jeopardize economic recovery efforts in vulnerable neighborhoods amid the COVID-19 pandemic, community development experts said.
Earlier this month, the Federal Reserve voted to begin revising the rules that banks must follow to comply with the Community Reinvestment Act — a 1977 law to promote equitable lending practices.
The Fed’s action, which opened up a public comment period, followed different rules finalized in May by the Office of the Comptroller of the Currency. The OCC’s rules were widely panned by community development advocates who said they would lower the burden on banks to meet their obligations under the law.
A third federal regulator, the Federal Deposit Insurance Corp., which oversees state-chartered banks, has not finalized new Community Reinvestment Act rules. The regulator pulled out at the last minute from the OCC rule-making.
