The New York Times, December 12, 2019: Bank Regulators Disagree on Changes to Rules for Poor Communities
Banks that have long lamented rules requiring them to do some of their business in less wealthy areas would get a break under a proposal released Thursday by two regulatory agencies.
But the industry’s most prominent regulator, the Federal Reserve, isn’t on board.
The central bank did not join in a proposal from the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation that would give the Community Reinvestment Act its first major overhaul in a quarter-century.
A Fed spokeswoman said that the central bank would be studying public comments on Thursday’s proposal, and that no decisions had been made on how to proceed. She reiterated that any revision must further the statute’s goal: encouraging banks to serve low- and moderate-income communities.
Critics said the proposed changes appeared to put those communities in the back seat.
“I’m very concerned that this proposal shifts the focus of CRA from making mortgage loans and small-business loans to lower-income people to a range of finance activities that are higher profit margin,” said Jesse Van Tol, the chief executive of the National Community Reinvestment Coalition, a nonprofit that seeks to help poor communities build wealth.