Akron Beacon Journal, January 15, 2020: Guest View: Proposed Banking Changes Need to Be Amended
A proposal by federal regulators updates but weakens the rules that are used to evaluate whether banks and credit unions discriminate in lending in low-income communities. It needs to be amended before it is adopted.
The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. propose to revamp the regulations behind the Community Reinvestment Act of 1977. Under the changes, banks would be encouraged to make loans to lower-income borrowers based on geographic concentrations of their deposits, a change from a current requirement that banks meet lending rules for all income levels of residents near their branches.
The National Community Reinvestment Coalition told The Washington Post that banks approved an average of $78 billion a year between 2012 and 2017 in community development loans and $55 billion a year in small business loans in low-income areas.
The proposed changes by the OCC and FDIC would still require banks to lend in lower-income areas near branches, but the institutions would be judged on all of their activities including in other areas where they have significant customer deposits.
