Trump Officials Seek to Change Rules on Lending to the Poor
The Trump administration plans to unveil a major revision to decades-old banking rules that mandate lending to poor borrowers.
Changes to the regulations of the Community Reinvestment Act—a law first enacted in 1977—could potentially transform the way banks make billions of dollars in loans, investments and donations to poorer customers. In all, they could make it easier for banks to meet certain lending requirements and lower penalties for compliance problems.
Community groups that support the law fear that any rollback could mean poorer people over time would have less access to loans and banking services. In recent years, for example, some lenders have focused on serving more affluent customers. The CRA, though, generally has prevented banks from focusing only on the wealthy.
Some of the government’s changes have already gone into effect. In early 2018, the Treasury Department is planning to unveil broader recommendations to revamp the government’s enforcement of the CRA, according to a Treasury spokeswoman.
The law was originally passed to stop “redlining”—a practice where banks wouldn’t lend money in certain poor neighborhoods, often hurting black and minority residents. In recent years though, it has become a source of conflict between community groups that want the rules to be enforced more strongly and bankers who argue the rules around CRA haven’t kept up with technological changes and penalize activity that isn’t directly tied to the act.
https://www.msn.com/en-us/money/markets/trump-officials-seek-to-change-rules-on-lending-to-the-poor/ar-BBIe23g?ocid=edgsp
