The Wall Street Journal, May 5, 2022, Fed, Biden Administration Float New Lending Rules for Lower-Income Areas
Top U.S. regulators proposed overhauling how banks lend hundreds of billions of dollars annually in lower-income communities, the first major revamp to the standards in more than two decades as lenders increasingly offer financial services online.
Consumer advocates said they hoped the proposal would boost banks’ obligations under the law. “The impact will be pretty clearly to raise the bar in terms of what’s expected from banks,” said Jesse Van Tol, president and chief executive of the National Community Reinvestment Coalition, a fair-lending advocacy group.
Mr. Van Tol said there is a major gap in one aspect of the proposal: It wouldn’t apply to the nonbank financial firms that now provide the bulk of the consumer loans in the U.S., such as in the mortgage market. Nonbanks originated about 75.5% of government-backed home loans as of March 2022, according to the Urban Institute.
