CRA

As the nation struggles with the coronavirus, now is not the time to make major revisions to the Community Reinvestment Act.

Lenders and community groups say it's a mistake for the banking agencies to move forward during a national crisis. But Comptroller of the Currency Joseph Otting says updated Community Reinvestment Act rules would speed relief to neighborhoods and small businesses.

Though she stopped short of mentioning the FDIC and OCC by name, Fed Gov. Lael Brainard objected to several key elements of those agencies' proposal.

The proposed changes laid out by banking regulators would clear up confusion about what qualifies for CRA credit within so-called Opportunity Zones. But not all community development advocates are convinced that the changes are for the better.

CIT Group has agreed to lend and invest the money mostly in California as well as in the eight states where Mutual of Omaha Bank has branches.

Seeking to expand financial services access, tribal officials and some firms want regulators to award Community Reinvestment Act credit to any bank that funds projects in Native American communities.

Banks currently can help their CRA performance with mortgages to anyone in a distressed neighborhood, but Joseph Otting said officials crafting a reform plan are considering limiting that to lower-income borrowers.

Will the new commitment, which is 5% over what the banks have reinvested recently on their own, assuage advocacy groups' concerns about the merger?

As policymakers mull ways to update the 42-year-old Community Reinvestment Act, economists at the San Francisco Fed have put forth a novel proposal.

The current debate around changes to the Community Reinvestment Act should include discussions about how the law can be used to better support low-income communities in remote areas.