Banker & Tradesman, July 19, 2020: OCC’s ‘Fix’ Weakens Anti-Redlining Law
Enacted in 1977, the CRA has done yeoman’s work over the past several decades in forcing lenders to serve all consumers in their banking footprints, not just the high-income, superior-credit borrowers. The net effect of the law has been to fight redlining — the practice of banks drawing a red line around neighborhoods in which they refuse to lend. Thus, the CRA makes mortgages, car loans and other products more available to a wider array of borrowers.
That’s why many in the business are puzzled as to the reasoning for the changes. Certainly, some of the circumstances don’t pass a sniff test, such as Comptroller of the Currency Joseph Otting’s resignation the day after the final rule was posted, after an abbreviated time to consider public comments.
