The Wall Street Journal, August 19, 2019: Bank regulator pitches low-income lending rule changes on US road trip
A national bank regulator is touring the country to sell his plans to modify lower-income lending requirements and overcome resistance from other regulators, banks and community advocates.
Comptroller of the Currency Joseph Otting, who took office in 2017, has made it a priority to revamp rules implementing the 1977 Community Reinvestment Act, which requires banks to serve borrowers of all income levels who reside near their branches.
The law was intended to combat the practice of redlining, or banks carving out poor and minority neighborhoods from their lending and investment plans. But at a time when many banking services are provided online there is growing consensus that the rules implementing CRA should be updated.
Community groups are skeptical of the proposals. Many of them raised concerns about his numbers-focused approach in private meetings with him last week, according to people in the room.
Such a system could open “a big loophole where banks can run up a dollar figure to hit some metric in one area of need, but largely ignore others,” Jesse Van Tol, chief executive of fair-lending advocacy group the National Community Reinvestment Coalition said. “That could have a very negative impact on communities.”
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