CRA Proposal Could Reshape Bank Lending And Affordable Housing Investment

The biggest concern for the mortgage market is what the higher thresholds could mean for affordable housing finance.

The National Community Reinvestment Coalition estimates the proposal would eliminate separate community development evaluations for roughly 814 banks. Another 417 banks would move from the large-bank examination framework to the intermediate category.

NCRC estimates the changes could put more than $500 million a year in community development loans and investments at risk. That estimate is NCRC’s, not the regulators’, but it points to a potential funding gap in markets that rely heavily on local and regional banks.