Bloomberg, October 25, 2023, Big Banks Face Fresh Anti-Redlining Rules From Top US Regulators
Top US banking regulators have updated decades-old rules that are meant to tackle redlining and boost lending to lower-income areas.
Under Tuesday’s plan, the landmark 1977 Community Reinvestment Act will for the first time cover online and mobile banking services. That means the grades that regulators give firms for lending to low- and moderate-income communities won’t be based just on the locations of physical branches. The overhaul will also stiffen other criteria for big lenders.
Data from the National Community Reinvestment Coalition shows that many non-White communities remain underserved almost half a century after the passage of the CRA. For example, Black borrowers in low- and moderate-income areas in most major US cities receive disproportionately fewer loans
In a bid to address that, the rule includes a revised test to measure a bank’s closed-end mortgages, automobile loans, small business and small farm loans. It also streamlines the criteria.