Regulators propose overhaul to law governing how banks lend to low-and-middle income communities
Summary
The Trump Administration proposed changes to the Community Reinvestment Act (CRA), a law that requires banks to help low- and middle-income neighborhoods. The changes would reduce the number of banks fully subject to the law and change how banks’ activities are evaluated, placing more focus on lending and less on branch openings or deposits.Key Facts
- The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation announced the proposed CRA changes.
- This is the first major update to CRA rules in nearly 30 years.
- The definition of a small bank will increase from under $412 million in assets to under $1 billion.
- Banks with $1 billion to $10 billion in assets will be classified as intermediate banks.
- About 800 fewer banks will need to meet parts of the CRA under the new rules.
- Only 86 banks, about 3% of all banks, will be fully regulated under CRA after these changes.
- New rules may limit which community development groups banks can fund, focusing on local groups rather than national organizations.
- Banks must provide more detailed data about community grants to increase transparency.
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