The Hill, May 7, 2021, Putting bank regulations on non-bank lenders will stifle innovation
According to a Wall Street Journal report, when Federal Reserve Chairman Powell recently spoke at a National Community Reinvestment Coalition event, he telegraphed his view saying, “like activities should have like regulation.” Powell’s speech argues that Community Reinvestment Act (CRA) reforms are needed to ensure that “everyone can contribute to, and share in, the benefits of prosperity.” Perhaps, but the Fed’s push to expand CRA regulation is likely just the first step toward expanding federal regulatory powers over non-bank lenders.
To date, the Fed, the Office of the Comptroller of Currency and the Federal Deposit Insurance Corporation have been unable to agree on a set of common revisions to CRA bank regulations. Notwithstanding chairman Powell’s stated concern for equity and inclusion, CRA regulatory reform is more likely to be catalyzed by an unholy alliance between Congress, bankers and federal regulators that targets growing competition from non-bank financial institutions.
