Politico: FDIC bid to overhaul anti-redlining law sparks protest by Waters

Politico, December 12, 2019: FDIC Bid To Overhaul Anti-Redlining Law Sparks Protest By Waters

The FDIC voted Thursday to propose a sweeping overhaul of a landmark law designed to prevent banks from discriminatory lending, triggering intense opposition from Rep. Maxine Waters and other Democrats, who say the plan deprives local communities of a say in how such loans are measured.

The proposed revision, spearheaded by Comptroller of the Currency Joseph Otting, is aimed at ensuring that more of the bank loans supplied under the Community Reinvestment Act go to lower-income borrowers and to more neighborhoods. But Democratic officials slammed the rule as achieving just the opposite.

Waters, who chairs the House Financial Services Committee, was agitated enough by the plan that she led a group of fellow lawmakers to watch the vote — a highly unusual move that underscores the significance of CRA, which was passed in 1977 to combat discrimination against poor and minority communities, a historic practice known as redlining.

“The Trump administration seems determined to radically overhaul and water down the compliance system by introducing a numerical measure of performance that has been widely criticized, by bankers as well as community advocates, as overly simplistic,” said Jesse Van Tol, CEO of the National Community Reinvestment Coalition.

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