Wall Street Journal, October 25, 2023, Banks Face Shake-Up Of Low-Income Lending Rules
WASHINGTON—Top US banking regulators struggled for more than five years to update anti-redlining rules aimed at making banks lend more in lower-income communities. On Tuesday, they completed a revamp of them for the era of online banking.
The 1977 Community Reinvestment Act sought to end banks’ historical practice of denying or limiting financial services in minority neighborhoods. The current rules, which are nearly 30 years old, generally require banks to serve everyone in the communities surrounding their branches, including lower-income people.
In recent years, the CRA rules have become a source of conflict between community groups that want the rules to be enforced strictly and bankers, who argue the regulations are too bureaucratic and haven’t kept up with technological changes, among other criticisms.
Jesse Van Tol, CEO of the National Community Reinvestment Coalition, a fair-lending advocacy group, said Tuesday’s plan would boost bank requirements in a way that would “drive billions of additional loans and investments to underserved communities.” CRA, he said, was much larger than other federal programs aimed at community development.