The Wall Street Journal, February 24, 2020: Top US Regulator Said To Lobby Bank CEOs on Overhaul of Low-Income Lending Rules
Joseph Otting, a top U.S. regulator, is personally lobbying bank chiefs to win support for his signature initiative: an overhaul of rules governing hundreds of billions of dollars in lending to low-income areas.
Otting, a former bank CEO himself, wants to rewrite the rules under the 1977 Community Reinvestment Act, which he says are vague and don’t account for the age of digital banking. Banks must heed the rules to win approval for mergers or to open new branches.
“The proposal would give banks nearly 30 times more credit for holding a typical home mortgage than for selling it into the secondary market,” said Buzz Roberts, president and CEO of the National Association of Affordable Housing Lenders. “For banks that would mean more risk and less liquidity while tying up capital that could be used to make more loans.”
“The proposal is so fundamentally flawed it really needs a rethink,” said Jesse Van Tol, chief executive of the National Community Reinvestment Coalition, an advocacy group.
