Financial regulators proposed Thursday an overhaul of a 40-year-old anti-discrimination law, potentially upending the way banks make loans to low-income communities.

The proposal is potentially another big win for the banking industry, which has argued for years that 1977’s Community Reinvestment Act was outdated and didn’t account for the popularity of online banking. Under the proposal, the industry would gain new flexibility when attempting to comply with the law aimed at stamping out redlining, in which banks either refused to lend to people in minority neighborhoods or charge those borrowers more.

Democrats and consumer groups warned the most recent proposal would make it easier for banks to comply with a law meant to stamp out decades of redlining while sapping investment in poorer communities. “This is a major transformation of the law. It upends how the CRA works,” said Jesse Van Tol, chief executive of the National Community Reinvestment Coalition.